The Taipei City Government yesterday reaffirmed its commitment to raising taxes on the city’s luxury apartment buildings.
The comment came after a survey indicating that most people expected house prices to rise in the capital and the four other special municipalities after the mayoral elections on Saturday.
Taipei Revenue Service Director Hsieh Sung-fang (謝松芳) said the city government planned to raise taxes on luxury homes on July 1 next year at the earliest.
A real estate panel will conduct a final review of the tax increase plan in the middle of next month, Hsieh said.
The city government plans to increase the taxes on upscale homes by between 1.2 times and 2.8 times their current rates, depending on their location and government--assessed value.
“The tax plan will affect 1 percent, or 10,000, of existing housing units and generate an extra NT$1 billion [US$32.47 million] for the city’s coffers a year,” Hsieh said by telephone.
Currently, the housing tax is 1.2 percent for self-use units, 3 percent for commercial establishments and 2 percent for mixed-use facilities. The levy accounts for about 18 percent of the city’s annual tax revenue.
Hsieh said the tax plan would not have a large impact on the property market as their actual market value far exceeds government--assessed figures.
“The tax burden on luxury homes will not increase much, based on the proposed formula,” Hsieh said.
He did not elaborate.
Other local governments have said they will consider raising their housing tax once Taipei City adopts the changes.
A poll by Taiwan Realty Co (台灣房屋) lent support to the city government’s view, with 52.52 percent of respondents saying they expected housing prices to climb further in the run-up to the presidential election in 2012.
Another 25.05 percent said they expected no changes, while the remaining 22.42 percent expected property prices to trend down, according to the survey, which questioned 1,329 people.
Taiwan Realty head researcher Chiu Tai-hsuan said the poll reflected a generally bullish outlook about the economy and the nation’s warming trade ties with China helped deepen the sentiment.
Taiwan and China are scheduled to hold a sixth round of trade talks here next month with medicine and heathcare, as well as investment protection, to dominate the agenda.
“More capital will flow to the property market given ample funds and limited investment channels,” Chiu said. “The low interest rates also encourage the trend.”
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