Home-buying interest dropped to the lowest level in five years this quarter and is set to remain low as the government plans to raise taxes on gains from housing transactions, Chinatrust Real Estate Co (中信房屋) said yesterday.
People who intend to buy houses within two years fell to 44.4 percent this quarter from 48.6 percent three months earlier, the lowest level since the broker launched quarterly surveys in 2009.
Chinatrust chairman Chris Cheng-Yu (鄭余正全) attributed the declining interest to the Ministry of Finance’s plans to impose income tax on gains on property transactions.
“The policy change would mean a tax rate of up to 45 percent on gains on property sales in excess of NT$10 million (US$329,900) in a year,” Cheng-Yu said.
It is not difficult for houses in Greater Taipei to meet the threshold, given the steep price hikes in recent years, he said.
The Ministry of Finance has said it would draw up a property tax reform package by the end of this year and likely make exceptions for houses valued less than NT$30 million and being held for a long period of time.
Although yet to be finalized, the levy proposal has weighed on the market, given that people with plans to buy houses in next six months fell to 2 percent, the broker said, adding that the upcoming nine-in-one elections in November enhanced the cautious sentiment.
Chinatrust vice chairman Richard Liu (劉天仁) said it is not fair to impose income tax on gains on property transactions on the grounds of income acquired in a year, because it takes many years for real-estate properties to increase in value.
About 45 percent of respondents shared the view and called for separation of income tax and capital gains from housing deals, the survey said.
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