Prop­erty cap­i­tal gains tax bill ap­proved by Leg­isla­tive Yuan

The China Post - - TAIWAN BUSINESS -

The Leg­isla­tive Yuan on Fri­day ap­proved a tax re­form plan pro­posed by the Min­istry of Fi­nance that will im­pose a cap­i­tal gains tax of up to 45 per­cent on prof­its made on the sale of prop­erty.

The new tax plan, sched­uled to take ef­fect on Jan. 1, 2016, is part of the gov­ern­ment’s ef­forts to rein in high res­i­den­tial hous­ing prices and rep­re­sents a ma­jor change from cur­rent prac­tices.

Gains on the sale of prop­erty are cur­rently taxed based on gov­ern­ment-as­sessed prop­erty val­ues, which are merely a frac­tion of the ac­tual sell­ing prices, but they will be taxed based on the ac­tual gains made in the fu­ture.

Luxury Tax to be Abol­ished

Once the new cap­i­tal gains tax goes into ef­fect, a luxury tax that has been en­forced since June 2011 will be abol­ished.

The luxury tax scheme, which also was put in place to keep hous­ing prices in check, im­poses a 15-per­cent sales tax on sec­ond homes sold within one year of pur­chase and a 10-per­cent sales tax on prop­er­ties sold be­tween one and two years af­ter they were bought.

In the newly ap­proved cap­i­tal gains tax scheme, home sell­ers will pay a 45 per­cent tax on their gains if they sell their prop­erty af­ter hav­ing owned it for less than one year.

The tax rate falls to 35 per­cent if the prop­erty has been held for one to two years, 20 per­cent if it has been held be­tween two and 10 years, and 15 per­cent for prop­er­ties held more than 10 years.

For For­eign­ers

Non-res­i­dent for­eign na­tion­als or for­eign in­sti­tu­tions head­quar­tered over­seas will face the same 45 per­cent tax rate when they dis­pose of a prop­erty af­ter own­ing it for less than a year, but the 35-per­cent tax rate will ap­ply to gains on sales of all prop­er­ties held for more than one year.

Peo­ple who live in the homes they own will get a tax break if they sell their home af­ter living in it for at least six years.

In those cases, gains of up to NT$4 mil­lion (US$129,450) will be tax ex­empt, and any gains above NT$4 mil­lion will be taxed at a 10 per­cent rate.

CNA

Leg­is­la­tors hold signs that ad­vo­cate for a new tax re­form plan. The Leg­isla­tive Yuan on Fri­day ap­proved the tax re­form pro­posed by the Min­istry of Fi­nance that will im­pose a cap­i­tal gains tax of up to 45 per­cent on prof­its made on the sale of prop­erty.

Newspapers in English

Newspapers from Taiwan

© PressReader. All rights reserved.