The Cabinet approved amendments to the Land Tax Act (
Under the present system, homeowners are entitled to land value incremental tax rates of up to 40 percent and can only enjoy the 10 percent rate once in a lifetime when selling a property.
The proposed amendments will need further review by the legislature and are expected to take effect at the beginning of next year at the earliest, the Cabinet said following a regular weekly meeting hosted by Premier Chang Chun-hsiung (張俊雄).
"These new measures will fit most people's needs in terms of selling and buying new homes," Chang said.
In 2002, the government temporarily halved the land value incremental tax -- a capital gains tax on property transactions -- for a trial period of two years and later extended it by an extra year in a bid to revive the sagging real estate market.
In 2005, the legislature approved amendments to permanently cut the tax by 20 percent, lowering the maximum rate to 40 percent from 60 percent.
The amendments announced yesterday and submitted to the legislature for further approval will allow homeowners to enjoy the 10 percent rate more than once, although some conditions must first be met.
To qualify for the lower tax rate, homeowners must have possessed their household registration at the location for more than six years and must prove they never leased or used the property as an office or for any other commercial purposes in the five years prior to the sale, the Ministry of Finance said in a statement issued later yesterday.
Restrictions also apply to land size, with only land plots measuring less than 45 pings in urban areas and 105 pings in rural areas qualifying for the lower tax rate, the statement said.
Deputy Minister of Finance Chang Sheng-ford (
He said the new regime would mean government losses of NT$6 billion (US$182 million) to NT$8 billion in annual tax revenues.
"But we are quite certain that this new mechanism will reinvigorate the local real estate business," Chang Sheng-ford said after the Cabinet meeting.
He said ministry data showed that homeowners would buy and sell their properties an average of three to four times in a lifetime. This was the main reason behind the decision to amend the law and make it more flexible, he said.
Tax specialists had long argued that in order to make efficient use of the nation's land, the government should reduce the tax rate on land transactions.
However, the new tax measure will be of limited help to the housing market, said Su Chi-jung (
During the past six years, despite the climbing price of land sparked by a sizzling property market, the announced land value -- the basis on which the land value incremental tax is calculated -- has changed very little, with a 3 percent increase each year, Su said.
The raise in the announced land value means that even without the preferential tax system, homeowners did not have to pay much land value incremental tax, he said.
The tax is even slimmer for apartment owners in high-rise buildings, as the share of land they own is even smaller, Su said.
"The incentive is not big enough to push people to sell or buy property," Su said. "Real demand and finance are the priorities for homebuyers in decision-making, not the tax rate."
Lai Cheng-i (
The nation's home ownership ratio is at 87 percent and many homeowners have more than one apartment or house, Lai said.
"The new tax measure will energize sales in the housing market and support the sector," he said.
The move also demonstrated the government's intention to lift the property sector. The positive sentiment should bolster the construction industry and optimism in the sector, he said.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to