Minister of Finance Lee Sush-der (李述德) yesterday said the ministry decided to defer its proposal to change the current flat housing tax rate to a five-tiered system to avoid unnecessary public worries over property tax hikes during an economic recovery.
Lee’s remarks came after Premier Wu Den-yih (吳敦義) said on Wednesday last week that the ministry’s proposed progressive housing tax scheme was not appropriate for the time being, a move considered by academics to be the product of political considerations.
“This doesn’t mean that the proposal to change the housing rate has been scrapped; instead, it is still under discussion,” Lee told a media briefing, adding that local governments had the authority to impose a higher property tax levy on luxury houses by revising the outdated valuations of properties.
The ministry’s proposal would have seen increases in taxes imposed on a house valued by the government at more than NT$1 million (US$ 31,400).
Given that local governments significantly underestimate the value of residential real estate, the ministry estimated that only 3 percent of house owners, or approximately 200,000 to 300,000 households, would need to pay more in house tax.
In accordance with the House Tax Act (房屋稅條例), for a house used for residential purpose, the rate is levied at 1.2 percent for a house valued at more than NT$100,000.
The proposed progressive tax rates range from 1.1 percent to 1.8 percent.
Saying in the past that the ministry expected to introduce the progressive rate as soon as next year, Lee said that the government “has no timetable” for this.
Meanwhile, the ministry said in a statement that the government’s deficit last year was estimated at NT$174.7 billion, greater than the budget deficit of NT$134.6 billion that lawmakers had approved.
ADDITIONAL REPORTING BY BLOOMBERG
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