Farglory Group (遠雄集團) chairman Chao Teng-hsiung (趙藤雄) yesterday voiced his reservations about a new set of planned tax hikes on luxury homes, saying that the move might hurt the housing sector and would also fail to improve the national treasury.
Chao made the remarks after the Taipei City Government said on Wednesday that it planned to raise taxes on the city’s luxury homes for the second time this year because it said the current levy is too low.
“Policymakers should think twice about tax reforms that may have a negative impact on business activity,” Chao said on the sidelines of a public function.
RECKLESS
Reckless tax increases might scare away investors, which is in opposition to the government’s efforts to boost private investment and create job opportunities, he said.
Chao, whose Farglory Land Development Co (遠雄建設) aims to launch NT$63 billion (US$2.2 billion) in new housing projects this year, questioned the wisdom of the proposed tax hikes, particularly after the city government has already increased the tax burden on about 10,000 luxury homes this month.
Upscale housing is also an indicator of a country’s internationalization and policies to discourage its presence serve only to impair that process, the land developer said.
UNREASONABLE
The Taipei City Government said that the present housing tax failed to reflect the true market value of luxury properties, rendering the levy unfair and unreasonable.
Fuel taxes on durable goods such as cars stand at about 2 percent of their value, whereas taxes on luxury homes is 0.1 percent, the city government said.
The housing tax on a 130-ping apartment unit in The Palace (帝寶), the nation’s most expensive housing complex, should rise to NT$2 million from the current NT$350,000, the city government said.
Chao said that he would respect whatever decisions the city reached on the issue, but he warned that it would take a great amount of effort to remedy an incorrect policy.
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New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last