Fri, Dec 16, 2011 - Page 12 News List

Luxury tax is bringing down prices, ministry says

By Amy Su  /  Staff Reporter

The Ministry of Finance said yesterday the “luxury tax” that was implemented on June 1 has helped slow both speculative transactions and unreasonably high housing prices in the real-estate market.

Revenue from the special tax on selected goods and services, also known as the luxury tax, totaled NT$1.72 billion (US$56.66 million) from June 1 to Nov. 30, with that from the levy on property transactions reaching NT$1.09 billion on 1,533 transactions during the period, the ministry said in a report.

“The six-month implementation of the selected goods and services tax has slowed the number of speculative transactions and prices in the housing market, especially in urban areas,” Minister of Finance Lee Sush-der (李述德) told a press conference.

From June to October, the number of buildings sold nationwide declined 14.86 percent to 138,717 from a year earlier, with transactions in Taipei and New Taipei City (新北市) sliding 23.03 percent and 26.55 percent to 18,420 and 31,520 respectively, both above average, Lee said, citing data from the Ministry of the Interior.

Lee attributed the decline to there being less speculative transactions, saying many speculative investors have left the market following the levy of the luxury tax.

In addition, the average real-estate price in Taipei fell 11.89 percent, the largest decline among five major urban areas in Taiwan, to NT$481,700 per ping (3.3m2) in August, from NT$535,200 per ping in May, a month before implementing the luxury tax, the ministry’s report said, citing data from the Joint Credit Information Center (聯合金融徵信中心, JCIC).

Meanwhile, the center’s preliminary data showed that prices in Taipei had further declined in September to an average of NT$419,600 per ping, the ministry said.

Real-estate agencies, however, did not see prices in Taipei decline as much as the ministry said.

Evertrust Rehouse Co (永慶房屋) yesterday said in a press release that prices in Taipei averaged NT$499,000 per ping for last month, only down NT$16,000, or 3.1 percent, from NT$515,000 per ping in May, citing data from the agency’s own research database.

Separately, an investment trust company yesterday won an auction for a floor in an office building on Dunhua South Road with a bid nearly equal to the floor price, auction organizer Savills Taiwan Ltd (第一太平戴維斯) said in a statement.

The winning bidder was the sole participant and Savills Taiwan said the recently passed property transaction disclosure rule dampened competition.

Additional reporting by Crystal Hsu

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