TAIPEI (Taiwan News) — Amendments to the Income Tax Act targeting real estate speculation should come into force on July 1, a legislative committee decided Wednesday (April 7).
Lawmakers already reached an agreement on the measures on March 29, but they failed to set a date for the changes in the integrated house and land transaction income tax to become valid, CNA reported.
Existing tax rules will be expanded to include businesses as well as individuals in order to prevent the formation of companies designed to pay only 20 percent corporate income tax on gains from property sales.
Under the new regulations, a tax of 45 percent will be paid on gains from the sale of property within two years of purchase and 35 percent for the period from two to five years. Foreign citizens and businesses will have to pay a tax rate of 35 percent for gains made after two years, legislators said.
The original law was designed in 2016 to curb speculation in residential real estate, with the latest changes a response to the heating up of the market amid low interest rates and high liquidity. Agents predicted a surge in the number of transactions during the first half of the year before the law takes effect.
The new package of measures still has to pass review by the full Legislative Yuan, CNA reported.