The Taipei City Government has raised property values at 99 locations across the capital in a continued, but subdued, attempt to increase holding costs for homeowners.
The upward adjustment will increase property-related taxes on 66,000 homes by an average of 9 percent as a result of a value reassessment conducted every three years to reflect market changes.
Most value increases are concentrated in Daan (大安) District in which property values on Yongkang, Wenchang, Yanji, Ruian and Lishui streets, as well as Siwei, Anhe and Daan roads rise 10 percent.
The adjustment will take effect next year and is expected to generate an extra NT$130 million (US$4.25 million) a year for the city coffers, the local government said.
The move will have only limited impact on the housing market because people will not feel the pinch until they pay the annual housing taxes or capital gains levy linked to home transactions, said Tseng Chin-der (曾進德), a researcher at Sinyi Realty Inc (信義房屋), the nation’s sole listed broker.
“The market will prove resilient to the value adjustment this time after emerging unharmed from a more drastic hike at 452 locations in 2011 that affected 370,000 houses,” Tseng said in a note.
The value reassessment is intended as a policy tool to moderate the city’s housing market, especially for upscale homes, since they benefit more from strengthened infrastructure facilities as evidenced by their steep price hikes, the city government said.
The construction on Taipei MRT’s Songshan Line and the launch in November last year of the Xinyi Line has helped boost housing prices along the metro lines by more than 10 percent in recent years, Tseng said.
Tongbei Street near the Dazhi MRT Station (大直捷運站) has seen its assessed value rise by the fastest pace at 50 percent, while Nanjing E Rd Sec 6 is up by 25 percent due to their relatively lower base, Tseng said.
The development of a high-end apartment complex on Tongbei St and a real price registration requirement have lent support to the value elevation in the neighborhood that is mainly populated by military servicemen and families, Taiwan Realty Co (台灣房屋) said.
Besides heavier house and capital gains levies, homebuyers will have to pay more contract tax on closing deals because of the value adjustment, Taiwan Realty said.