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Commercial Times: Revise luxury tax to rebuild government credibility

Commercial Times: Revise luxury tax to rebuild government credibility

Two years after the implementation of the luxury tax, housing prices in Taiwan are continuing to rise. According to the latest survey released in late July by Cathay Real Estate, Taiwan's average housing price reached a record high of NT$278,300 per ping (1 ping is equal to 3.3 square meters) in the second quarter of this year. In Taipei City, the average price was NT$864,200 per ping, up 11.48 percent from the previous quarter. Data published by the Taipei city government, meanwhile, reveals that a standard housing unit in the city cost NT$13.35 million in April this year, up 6.7 percent from August 2012. It seems that the luxury tax, which was introduced to ease public complaints about exorbitant housing prices, has not achieved its purpose. The Ministry of Finance is therefore planning to revise the tax and will hold discussions on the issue later this month. The scant availability of land is the main reason for high housing prices in metropolitan areas. Instead of trying to suppress housing prices, the government should focus its efforts on increasing the cost of home ownership for the wealthy during the upcoming revision. At present, the costs for people to own non-self-use residences are too low. Real estate and land taxes in Taiwan are calculated based on government-assessed prices that are far lower than the true market value. The governments of Hong Kong and Singapore, for example, have imposed an additional stamp duty on people who own more than one residence to try to curb real estate speculation. A surplus of liquidity and low interest rates are factors that are causing property prices to spike. Any revisions should include measures to monitor real estate financing by the banking system. (Editorial abstract -- Aug. 13, 2013) (By Y.F. Low)


Updated : 2021-05-18 20:30 GMT+08:00