High-end com­mer­cial prop­erty trans­ac­tions down over 60% in Q1

The China Post - - TAIWAN BUSINESS -

The value of high-end com­mer­cial prop­erty in Tai­wan for the first quar­ter of this year fell more than 60 per­cent from a quar­ter ear­lier, ac­cord­ing to statis­tics com­piled by Yung Ching Re­alty Group ( ) with an­a­lysts at­tribut­ing the fall to cau­tious sen­ti­ment to­ward a gov­ern­ment tax re­form plan.

Dur­ing the Jan­uary- March pe­riod, the trans­ac­tion value of stores, of­fices and fac­to­ries car­ry­ing a price of tag of NT$100 mil­lion (US$3.21 mil­lion) or higher each in Tai­wan to­taled NT$8.49 bil­lion, down 62.5 per­cent from a quar­ter ear­lier, the data showed.

The first quar­ter fig­ure ac­tu­ally fell to a three-year quar­terly low, the statis­tics in­di­cated.

In Taipei, the most watched prop­erty mar­ket in Tai­wan, the trans­ac­tion value of com­mer­cial prop­erty priced at NT$100 mil­lion or higher for the first quar­ter also fell 69 per­cent from a quar­ter ear­lier to NT$3.99 bil­lion, Yung Ching said. Yung Ching is one of Tai­wan’s lead­ing prop­erty sales agen­cies.

Huang Tseng- fu, a manager with Yung Ching’s as­set man­age­ment di­vi­sion, said that the fall in com­mer­cial prop­erty trans­ac­tion value largely re­flected fears over the gov­ern­ment’s plan to col­lect cap­i­tal gains taxes on prop­erty sales.

Ac­cord­ing to the lat­est ver­sion of the tax plan pro­posed by the Min­istry of Fi­nance, 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 or 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.

The tax re­form mea­sure marks a sig­nif­i­cant change from the present prac­tice in which 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.

Huang said that the higher tax bur­den has turned many prop­erty in­vestors away from the mar­ket.

In the first quar­ter, the trans­ac­tion value of prop­erty si­mul­ta­ne­ously used for of­fices and fac­to­ries to­taled US$3.44 bil­lion, ac­count­ing for 40.5 per­cent of to­tal com­mer­cial prop­erty sales, rep­re­sent­ing the largest trans­ac­tion cat­e­gory, Yung Ching said.

Yung Ching said that the tech­nol­ogy sec­tor served as the largest buyer by pour­ing NT$3.64 bil­lion into the lo­cal com­mer­cial prop­erty mar­ket over the three month pe­riod.

Ac­cord­ing to Yung Ching, Ga­ma­nia Corp. ( ), a Tai­wan-based PC on­line game de­vel­oper, spent NT$2.39 bil­lion to pur­chase a com­mer­cial build­ing lo­cated in the Neihu dis­trict of Taipei, the largest trans­ac­tion in the first quar­ter. The pur­chase trans­lated into a price of NT$401,000 per ping (3.3 square me­ters).

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