The Ministry of Finance (MOF) is planning to encourage local governments to raise the house tax on people who own several properties, in a bid to curb speculation in the housing market.
The move would be one of the supplementary measures under the revised draft of the luxury tax the ministry is set to unveil in the middle of next month.
“Based on the ministry’s survey, more than 660,000 people own three or more properties,” Minister of Finance Chang Sheng-ford (張盛和) said in a legislative question-and-answer session, citing data offered by the ministry’s Fiscal Information Agency.
Chang said the ministry encourages local governments to raise house tax rates on people who own several properties, such as people who own additional houses to rent out.
However, people who only own one house will not see any changes, Chang added.
The ministry’s plan comes following a suggestion by Chinese Nationalist Party (KMT) Legislator Sun Ta-chien (孫大千) that the government should impose an additional tax for people who “stock pile real estate.”
Currently, local governments determine their own rate of property taxation, with all setting the rate for residential properties between 1.2 percent and 2 percent of the real estate value.
Chang said the ministry may raise the subsidies granted to local governments that generate more revenue through property taxation.
Meanwhile, the ministry plans to increase tax inspections on people who own more than one house to prevent them from failing to declare income derived from real estate.
The ministry will also strengthen its supervision of tax related to pre-sales homes to curb speculative housing transactions, Chang said, adding that low-priced homes will also be inspected.