Residential transactions in Taipei and New Taipei City (新北市) fell almost 20 percent in the first 11 months of last year, after the government introduced the luxury tax in an attempt to cool down the local property market, statistics showed.
According to data compiled by U Trust House (有巢氏房屋), one of Taiwan’s real estate agencies, residential transactions in New Taipei City in the 11-month period fell 19.7 percent from a year earlier to 78,230 units, marking the steepest decline among the nation’s five special municipalities.
In Taipei, also one of the five municipalities, residential transactions during the same period fell 18.3 percent year-on-year to 46,496 units, the agency said on Saturday.
The luxury tax went into effect in June, imposing a 15 percent sales tax on second homes sold within one year of purchase and a 10 percent sales tax on properties sold between one and two years after they were purchased.
The agency also cited the economic slowdown caused by global financial uncertainty as a factor contributing to the rising reluctance to trade in the domestic property market.
For the other three special municipalities, Greater Taichung saw residential transactions drop 3.8 percent from a year earlier to 46,566 units and Greater Kaohsiung also encountered a 3.8 percent decline in transactions to 34,560 units, while Greater Tainan bucked the downtrend, registering a 0.1 percent increase to 19,721 units.
Elsewhere throughout the country, Hsinchu County enjoyed a 29.6 percent increase in transactions from a year earlier to 10,909 units, the highest growth in the nation, while in Hsinchu City transactions increased 5.8 percent year-on-year to 11,314 units, U Trust House said.
The agency also said that residential transactions in Taoyuan County fell 2.2 percent from a year earlier to 42,098 units.
U Trust House said the property market began its downturn in the second half of last year, adding that legal amendments passed by the legislature last month, which require the registration of actual real estate transaction prices in an effort to further curb speculation, are expected to further influence property prices.
Earlier this week, Highwealth Construction Corp (興富發建設), one of the nation’s leading property developers, cut prices by 15 percent to 20 percent for its development projects planned for this year.
Analysts said the price cuts reflected market realities.