Alexa
  • Directory of Taiwan

Rates in property capital gains tax scheme set at up to 45%

Rates in property capital gains tax scheme set at up to 45%

Taipei, May 13 (CNA) The Executive Yuan completed Wednesday a review of a capital gains tax proposal targeting sellers in the local property market that will demand tax rates of up to 45 percent. The maximum tax rate in the latest version of the capital gains tax scheme is higher than the 35 percent set in the previous version before the Cabinet's review. Duh Tyzz-jiun (???), minister without portfolio, said the Executive Yuan will soon hold a series of hearings all over the country to collect opinions from the public in a bid to adjust the tax scheme before the proposal is sent to the Legislative Yuan for ratification. The Cabinet said it has scheduled the tax scheme to take effect on Jan. 1, 2016 if the proposal gets passed by lawmakers. Duh said the capital gains tax scheme aims to raise the tax burden shouldered by property sellers who have held their property for just a short time before selling, but to benefit sellers who have held their property for longer and to give even better preferential tax status to sellers who have held their property for even longer. Market analysts said that the new tax scheme is designed to rein in skyrocketing home prices in Taiwan by curbing market speculation, which is perceived as the driver of high property prices. The tax reform measure marks a significant change from the present practice in which sellers are taxed based on their capital gains from the actual sales amount rather than the current government-assessed property value, which is merely a fraction of the selling price. Under the latest version of the tax scheme, home sellers will face a 45 percent tax if they sell their property after having owned it for less than one year. In cases which they have held the property for one to two years or two to 10 years, or more than 10 years, the tax rate will fall to 35 percent, 20 percent and 15 percent, respectively. In the previous tax scheme version proposed by the Ministry of Finance, the tax rate was 35 percent for sellers who had owned their property for less one year. In cases where they had owned property for one to two years or two to 10 years, or more than 10 years, the rate would fall to 30 percent, 17 percent and 12 percent, respectively. Sellers who dispose of homes used for self-dwelling purposes will face a 10 percent tax rate if they secure more than NT$4 million (US$130,293) in profit from their transactions, according to the tax scheme. (By Hsieh Chia-chen and Frances Huang)


Updated : 2021-09-19 22:59 GMT+08:00