Approximately 300,000 households will have to pay higher taxes under a Ministry of Finance plan to introduce a progressive housing tax on residential units, Deputy Minister of Finance Chang Sheng-ford (張盛和) said yesterday.
Chang made the remarks after a ministry meeting with the heads of local tax offices to discuss proposed amendments to the House Tax Act (房屋稅條例), including raising housing and land value taxes, to achieve an equitable taxation system and curb property speculation.
The ministry is planning to change the current flat housing tax rate for residential units of 1.2 percent to a range of 1.2 percent and 1.8 percent, depending on the valuation of the properties by local governments.
“Under the new rate, 96.56 percent of households will still pay the same housing tax rate, while 3.4 percent — or about 300,000 households — will be taxed at a higher rate,” Chang said.
Houses with a valuation of between NT$100,000 (US$3,100) and NT$1 million will be taxed at a rate of 1.2 percent, followed by 1.3 percent for houses worth between NT$1 million and NT$4 million, 1.5 percent for houses worth between NT$4 million and NT$8 million and 1.8 percent for houses worth more than NT$8 million, Chang said.
Under the plan, the minimum tax rate for commercial properties will also be raised to 3.5 percent, from 3 percent, while the minimum tax rate on properties neither designated for residential or business use, such as private hospitals, will be raised to 2 percent, from 1.5 percent, the ministry said.
“The upward adjustment will have little impact on the public, as most local tax offices have already adopted a 2 percent rate,” Chang said.
The land value tax rate, meanwhile, will be raised by between 0.2 percentage points and 1 percentage point to a range of 17 percent and 65 percent, which is expected to affect 190,000 households, he said.
At a separate setting, Citibank Taiwan Ltd chairman Morris Li (利明獻) told the Taipei Times that the government’s various measures to curb property speculation would not have much impact on the real estate market.
Li said that with the economy recovering and abundant liquidity in the market, property prices were still expected to climb in a long term, adding that the government was unlikely to use a blanket policy to tighten credit as unemployment remained high.
“To mop up excess liquidity, the government should instead inject more funds into value-added infrastructure while working to boost economic development,” he said.
RSS