The Taipei City Government yesterday raised the current assessed land worth in the capital by an average 12.08 percent, the steepest hike in 19 years. The hike will subject property transactions to higher land value increment levies next year.
The adjustment, conducted annually by local governments, aims to better reflect changes in actual property prices and raise transaction costs amid mounting public complaints about soaring housing costs.
“The sharp increase in both real-estate transactions and prices warrant the hikes,” the city’s land department said in a statement. “The capital city, a beneficiary of assorted infrastructure facilities, is the top choice in terms of housing locations nationwide.”
The current assessed land values are the tax base for land value increment levies — from 20 percent to 40 percent of appraised worth — on property sellers upon real estate transactions.
The reappraisal is carried out by a panel of property academics, experts and officials that divided the city into 12 administrative districts, which were then divided into 3,400 sections.
Assessed land values in Zhongzheng (中正), Xinyi (信義) and Da-an (大安) districts increased by 12.59 percent, 12.57 percent and 12.51 percent, topping those in other districts, the department said.
“The three districts enjoy better public transportation services and benefit the most from the urban renewal program,” the department said.
The Shin Kong Tower (新光摩天大樓) across from Taipei Railway Station in Zhongheng District will retain its “king of the land” title for the 13th consecutive year at NT$3.64 million per ping (3.3m2) next year, from NT$3.39 million this year, according to the report. Current assessed land value for The Palace (帝寶), Taiwan’s most expensive housing complex, rose from NT$1.18 million (US$38,689) per ping to NT$1.43 million, the report said.
The hikes will go into effect on Jan. 1, meaning higher taxes on property transactions next year. The increase was 2.12 percent for this year and 2.61 percent last year, the report showed.
Stanley Su (蘇啟榮), head researcher at Sinyi Realty Co (信義房屋), the nation’s only listed real-estate brokerage, said it was too early to gauge the impact of the adjustments, although he added that they would surely weaken real estate investment profitability.
Su said housing prices have risen about 10 percent this year, which is higher than the tax increase.
Lee Jain-ming (李健銘), another researcher at Sinyi, said the land value reappraisal would deepen cautious sentiment, after the Taipei County Government raised assessed land values there by an average of 15.3 percent, while the Ministry of Finance is preparing to hike income tax from property transactions.
Adding to worries, the central bank is expected to raise its policy interest rates for the third time this year at its policy meeting on Dec. 30 to help cool the domestic property sector, Lee said.