News
Real estate tax reform proposal gets lukewarm response
The cabinet's initial proposal to raise the annual tax on people who own multiple homes is getting a rather muted response from the island's real estate sector.
The plan, which is aimed at curbing housing speculation, will increase the maximum tax rates for properties that are not owner-occupied to 4.8% from the current 3.6%. Under the new system, the total number of vacant homes islandwide will be counted when the owners file house taxes separately with local governments.
According to the Federation of the Real Estate Development Associations, the move will be unfair to house builders given the enormous investments poured into new constructions while a research manager with Sinyi Realty says the reforms will not affect most owner-occupied houses, but could significantly raise the tax burden on the owners of new constructions.
The proposal, first put foward by the Ministry of Finance (MOF), would see the yearly tax on residential properties not occupied by their owners or registered for rental hiked from the current 1.5% to 3.6% of a property's value. Administration head Sung Xiu-ling says the plan requires all local governments to impose proportional rates on taxpayers according to the number of vacant properties they own. Sung says currently only 10 local authorities have such taxation rules in place. The proposal will also affect property owners who have multiple vacant homes, as the total number of their properties will be considered when they file house taxes separately with local governments.
Finance Minister Zhuang Cui-yun says data shows the plan to increase taxes on vacant housing will affect some 360,000 residential properties and generate additional government revenues totalling NT$2.6 billion per year.
