Home transactions in Taipei City and New Taipei City fell almost 20 percent in the first 11 months of 2011 after the government introduced the luxury tax in an attempt to cool down the local property market, statistics showed Saturday.
According to data compiled by U Trust House, one of Taiwan’s real estate agencies, home transactions in New Taipei City in the 11-month period fell 19.7 percent from a year earlier to 78,230 units, marking the steepest decline among the five special municipalities on the island.
In Taipei City, also one of the five municipalities, home transactions during the same period fell 18.3 percent year-on-year to 46,496 units, the agency said.
The luxury tax went into effect in June, with a 15 percent sales tax imposed 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 purchased.
The agency also cited the economic slowdown at home and abroad caused by the global financial turmoil as a factor contributing to the rising reluctance to trade in the domestic property market.
For the other three special municipalities, Taichung City witnessed home transactions down 3.8 percent from a year earlier to 46,566 units and Kaohsiung City also encountered a 3.8 percent decline in transactions to 34,560 units, while Tainan City bucked the downtrend, registering a 0.1 percent increase to 19,721 units.
Elsewhere in Taiwan, Hsinchu County, enjoyed a 29.6 percent increase in home transactions from a year earlier to total 10,909 units, the highest growth on the island, while in Hsinchu City, home transactions rose 5.8 percent year-on-year to 11,314 units, U Trust House said.
The agency also stated that home transactions in Taoyuan County fell 2.2 percent from a year earlier to 42,098 units.
U Trust House said the local property market started a downturn in the second half of last year, adding the law amendments passed in the Legislative Yuan in December to ask registration of actual real estate transaction prices to further curb speculation are expected to further influence property prices.
Earlier this week, Highwealth Construction Corp., one of Taiwan’s leading property developers, cut prices by 15 to 20 percent for its development projects planned for 2012 to woo potential buyers.
Market analysts said the price cuts simply reflected market reality.