Housing transactions in Taipei, Taoyuan, Tainan rebound
Residential and commercial property transactions in March rebounded in Taipei, Taoyuan and Tainan cities as the number of business days returned to normal during the month, after the Lunar New Year holiday in February, market analysts said Saturday.
More importantly, transactions were boosted in March because concerns over the capital gains tax targeting home sales showed signs of fading, and investors rushed to return to the market to buy, analysts said.
According to market statistics, transactions of homes, offices and shops in Taipei in March rose 17.7 percent from a month earlier to 2,179 units. Taipei, the capital of Taiwan, is the most watched property market in the country.
In Taoyuan, northern Taiwan, transactions of residential and commercial property in March increased at a higher rate of 41.8 percent from February to 2,846 units, while housing sales in Tainan, southern Taiwan, totaled 1,515 units, up 29.4 percent from a month earlier.
Chang Ching-yun, head of research at National Realty, said that a plan proposed by the Ministry of Finance under a tax reform scheme to collect the capital gains on home sales has become more lenient, helping buying interest recover in the local property market.
According to the latest version of the tax plan, home sellers will face a 35 percent tax if they sell their property after having owned it for less than one year. In cases where they had held the property for one to two years and two to 10 years, the tax rate will fall to 30 percent and 17 percent, respectively.
If they had held the property for more than 10 years before selling, the tax rate will fall further to 12 percent.
In the original version of the tax plan, home sellers would have faced a tax rate of as much as 45 percent.
Still, the tax reform measure marks a significant change from the present practice in that home sellers will be taxed based on their capital gains from the actual sales amount rather than the current government- assessed property value, which is merely a fraction of the selling price.
The tax plan is pending approval from the Legislative Yuan.
Chang said that she expects buying in the local property market will rise further after lawmakers ratify the tax bill and remove uncertainty from the market.
But in Taipei, despite a monthon- month rebound in housing transactions, sales still fell 17.7 percent from a year earlier to a new low in almost two years.
Zhongshan District registered the largest transactions of 339 units, ahead of Neihu District with 283 units and Wenshan District with 263 units.
In the other two cities, buying interest had also significantly dropped compared with last year. In Taoyuan, housing sales for March plunged 26 percent from a year earlier, while selling prices also fell about 10 percent, the statistics showed.
In Tainan, March property transactions also fell compared to last year, registering a 13.7 percent year-on-year fall, but home prices appeared stable due to a relatively low comparison over the same period in 2014, the data indicated.