The Ministry of Finance yesterday defended its plan to introduce a luxury tax on short-term housing transactions, saying it would help build a healthy housing market.
The ministry said the tax is aimed at curbing speculative real-estate trading and would have a positive impact on the housing market in the long term.
The ministry is scheduled to hold meetings with economists and business representatives to discuss the tax proposal this morning and on Friday.
The ministry said if everything went smoothly, it would submit it for the Cabinet’s approval on Thursday next week.
The Real Estate Marketing Agency Association has called for a selective imposition of the tax on regions that have higher housing prices, such as Taipei, but Deputy Minister of Finance Chang Sheng-ford (張盛和) said it would be better to implement the tax nationwide.
“Levying a luxury tax should drive the number of short-term speculative investments in the housing market while boosting long-term investments, making for a healthier housing market,” Chang said.
Implementing such a tax will be fair as 70 to 80 percent of homeowners use them for their own purposes — not as a form of investment, Chang said.
“The government should focus more on the public and the majority’s opinions,” he said.
The ministry is still working on the proposed tax, including possibly levying a 10 percent tax on designer furniture and fur coats valued at more than NT$500,000 (US$16,850), a Taxation Agency official said yesterday.
He added that the government might reserve the right to set the prices for these luxury goods to prevent retailers from offering deep discounts to help buyers avoid the tax.
It might also include a clause allowing the Cabinet to suspend the tax during a recession, he said.
The luxury tax unveiled last week proposed a 15 percent tax on real estate bought and sold within the same year for speculative investment purposes, while a 10 percent tax would apply to properties changing hands within two years, a Taxation Agency statement said.
A 10 percent tax would also be levied on private jets, yachts and luxury cars with a price tag exceeding NT$3 million. The tax would also apply to club memberships fees of more than NT$500,000, the statement showed.
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