TAIPEI (Taiwan News) — Foreign residents who meet the necessary conditions will be eligible for lower tax rates next year on houses they own and occupy.

To stem rampant housing speculation, the “House Hoarding Tax 2.0” (囤房稅2.0) came into effect July and will be imposed for the first time in May next year. On Wednesday (Sept. 4), the Ministry of Finance (MOF) said foreign nationals and residents of Hong Kong and Macau with a Taiwan residence permit will be eligible for preferential tax rates for their houses, with around 16,000 expected to benefit.

The House Hoarding Tax 2.0 is a revision to Taiwan’s housing tax system aimed at promoting housing justice and curbing real estate speculation by imposing a higher property tax on individuals who own multiple non-owner-occupied homes. Among its key provisions is to raise the tax rate for non-owner-occupied residential properties to a range of 2% to 4.8%, while the rate for owner-occupied houses will be reduced to 1%.

Another key component is that household registration will be changed from counties and cities to a nationwide registry, to prevent speculators who hoard houses in different regions from evading taxes.

MOF said that although foreign permanent residents cannot obtain a Taiwanese household registration, the new policy will treat them as if they have household registration for house and land tax purposes. 

Resident permit holders whose properties meet the following criteria will be eligible for the self-use residential tax rate:

Foreign nationals, Taiwanese without household registration, people originating from China, and residents of Hong Kong or Macau who obtain a Taiwan residence permit and whose residential address is owned by themselves, their spouse, or direct relatives, or if they hold the usage rights for the property.

The house must comply with Article 5, Paragraph 4 of the House Tax Act (房屋稅條例)" and Article 2 of the Standards for the Recognition of Owner-occupied Houses and the Status of an Individual to Rent Premises for Public-Welfare Purposes, meaning it is not rented out or used for business purposes. The property must be used by the owner, their spouse, or direct relatives for residential purposes. 

If the owner, spouse, and minor children own up to three homes nationwide, they will be taxed at the self-use residential rate of 1.2% for house tax. If they own only one home with a value below a certain amount, the rate will be 1%.

The land must comply with Articles 9 and 17 of the Land Tax Act (土地稅法) and Article 4 of Enforcement Rules of the Land Tax Act, meaning it is not rented out or used for business. The urban land area must not exceed three acres, and non-urban land must not exceed seven acres.

Ownership is limited to one property per owner, spouse, and minor dependents, and land value tax will be levied at the self-use residential rate of 0.2%.

MOF reminds residents that properties meeting the above self-use criteria should apply to local tax authorities at least 40 days before the tax collection date (by March 22 for house tax and by Sept. 22 for land tax) to protect their rights.