Home purchases to rise ahead of new tax: realtor
Of those who plan to make a home purchase before the end of year, more than 60 percent said they are doing so to take advantage of the old system before the consolidated housing and land tax is launched next year, according to a survey conducted by Taiwan Realty Co. ( ).
The survey found
that 35.26 percent of the population wants to make a housing purchase in the latter half of the year, 63.64 percent of who said they made the decision in order to remain eligible for the existing tax system.
Taiwan Realty therefore predicted a surge in property trade as people race to buy homes.
The consolidated housing and land tax is scheduled to kick in on Jan. 1, 2016, and those who ac- quire homes before Dec. 31, 2015 and then keep them for two years will qualify for the original system.
In regards to why people do this, Taiwan Realty spokeswoman Charlene Chang ( ) explained that the face value of properties is amortized over the years, which is then translated into lower tax payments, based on the existing system.
The new system, however, will take home value appreciation into account, and the longer people hold property, the higher tax they may have to pay, Chang said.
Most of the Public Uncertain
about the New System
Taiwan Realty’s survey also found the majority of the public does not have a good grasp of the new system. Only 6.28 percent said they understand the consolidated housing and land tax completely; 25.6 percent said they somewhat understand; 57.98 percent said they don’t know about the tax; and 10.14 percent said they had never heard of the consolidated tax.
Under the current system, housing and land taxes are paid separately, and tax payments are calculated based on governmentdeclared face value, which in most cases falls way below the market price, by 20 to 80 percent, said lo- cal sources. The consolidated tax aims to correct the inaccuracy.
Under the new system, those who sell their self-use homes are eligible for NT$4 million in tax deductibles. A relatively low 10-percent tax rate will be applied on the capital gains that go beyond the NT$4 million mark.
However, there are conditions required for a property to be considered self-use: a household registration at the property, staying at the residence for six continuous years, and the absence of any rental or other business activities.
In regards to sales of other types of real estate, a 45-percent tax rate is applied on properties held less than 1 year, 35-percent for those held between 1 to 2 years, 20-percent for those kept 2 to 10 years, and 15-percent for those held over 10 years.