Alexa

Plan for land-tax revision finalized

Plan for land-tax revision finalized

The Cabinet finalized a plan yesterday that will enable more homeowners to benefit from a lower land-tax rate when they sell their properties, a proposal it hopes will stimulate the real estate market and boost economic development.
The measure, which still must be passed by the Legislature to take effect, would benefit an estimated 68 percent of all households in Taiwan but cost the government NT$6 billion to NT$8 billion in annual revenues, Vice Minister of Finance Chang Sheng-ho said yesterday.
Property sellers in Taiwan are taxed on the amount the publicly assessed value of their land has risen during the time they have owned the property, at rates of 20 percent, 30 percent and 40 percent, depending on the land value. Under existing law, homeowners are entitled to a preferential rate of 10 percent on one property sale during their lifetimes.
The newly proposed law, however, would not limit the number of transactions that would be eligible for the preferential rate, but would impose some limitations such as land area and how long the property has been in the same owner's hands.
Eligibility for the preferential rate would be restricted to those who owned their property for at least six years before selling it and had not rented it or used it for business purposes in the five years prior to the sale, Chang said.
On the move
At present, the average Taiwanese household changes houses three to ten times in its lifetime and lives in a house for an average of 10.8 years, the official said.
The new plan would also limit the tax break to urban residential properties that did not exceed 1.5 acres (about 45 pings) of land and non-urban properties with land areas not exceeding 3.5 acres (about 105 pings), cutting in half the maximum areas eligible under the existing "once in a lifetime" system.
The plan would primarily target the middle class, more specifically the 68.45 percent of all households in Taiwan that own only one home, said Chang, citing a government survey.
Cabinet Secretary-General Chen Chin-jun (陳景峻) said that although the government revenues would fall under the plan, it would provide a boost to the real estate sector and economic development as a whole.
According to one local developer, a recent survey indicated that households in metropolitan areas own an average of 7.2 pings of land, meaning that if passed, the law would benefit most local residents.
One incentive that would remain in place under the new draft bill is a tax rebate system.
Private homeowners who buy a new house within two years of selling their previous property can have the land tax refunded if the new property's land value exceeds the land value of the old property minus the amount of tax paid.


Updated : 2021-04-13 15:43 GMT+08:00