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Taxes to be levied on combined value of property and land

Taxes to be levied on combined value of property and land

Taipei, Feb. 12 (CNA) The Finance Ministry on Thursday announced a tax reform that will introduce a single tax on the combined value of property and the land it sits on, effectively raising taxes when it goes into effect in 2016 to implement what the ministry called "housing justice." Once it takes effect, a 30 percent gains tax will be put on any deal of property and land that has been owned for less than two years, after which the tax rate will drop to 17 percent, the ministry said. If sellers lose money in the transaction, the new regulation guarantees that that the deficit can be deducted from other real estate transactions made within the next three years. The ministry said this represents a huge benefit for people who are actually living in the house that they intend to sell and not just investing or speculating. Additionally, eligible sellers who have lived on the property and land they are selling for six consecutive years and not used it for commercial purposes or rented it will not be taxed on capital gains -- a special permission that can be executed once every six years. The new rules affect only homes purchased in the past two years. Finance Minister Chang Sheng-ford (???) said in 2016, he expects 5,251 non-commercial properties changing hands to be affected by the new rules, accounting for 0.05 percent of the 9.74 million properties in Taiwan. Under the existing system, when a home is sold in Taiwan, homeowners have to pay both a property tax and a land value tax, which are calculated based on government assessments of each item that often fall far below the actual transaction price. The new regulation will tax the gains based on the actual amount, increasing the tax burden on home sales and helping to rein in Taiwan's high-flying property market. (By Wei Shu and Lee Hsin-Yin)


Updated : 2021-09-17 16:10 GMT+08:00