Major property brokers saw an increase in buying interest this month, but transactions remained low because the market needs more time to digest the new property tax plans, analysts said.
“There was obviously an increase in buying interest over the Lunar New Year, but many prefer to look around a bit longer,” said Jessica Hsu (徐佳馨), spokeswoman at H&B Realty Co (住商不動產), the nation’s largest broker by number of franchises.
The number of potential buyers increased 5 percent in both Taipei and New Taipei City compared with last month, Hsu said, adding that the trend was more evident in central and southern Taiwan.
There was a 13.7 percent jump in prospective buyers in Taichung, an 8.9 percent rise in Tainan and a 16.4 percent increase in potential buyers in Kaohsiung, Hsu said.
Hsu attributed the increased interest to the much more lenient income tax terms the Ministry of Finance has proposed on property transactions.
Under the ministry’s draft proposal, homes sold for NT$40 million (US$1.27 million) or more would be subject to a 17 percent capital income tax on gains.
The rate would rise to 30 percent for foreign buyers and homes sold within two years of purchase, according to the draft, which still needs to be approved by the Legislative Yuan.
Most prospective buyers are looking for small apartments valued below the taxable threshold, Hsu said.
“That explains why buying interest is stronger outside of Taipei,” she said.
The ministry’s draft plan would allow sellers of luxury homes to file for full tax returns if they can produce proof of self-occupancy for six years.
Evertrust Rehouse Co (永慶房屋), the nation’s largest real-estate agency by number of outlets, said buying interest is being driven by investment needs.
Investment needs accounted for nearly 30 percent of transactions in Taipei this month after dropping to 18 percent last month, as concerns about unfavorable tax terms dropped significantly, Evertrust spokesman Andy Huang (黃舒衛) said.
Relocation needs drove 35 percent of transactions in Taipei this month while first-time purchases slipped to 19 percent, Huang said.
“The figures show a rebound in asset allocation needs, which may deepen as the tax plans pan out,” Huang said.
However, transactions remain soft this month because buyers are unwilling to meet higher prices and sellers are refusing to budge, Evertrust said.
Taiwan Realty Co (台灣房屋), another leading property broker, said that housing prices held relatively firm in the six special municipalities this month, despite the sluggish market.
The broker said it expects the situation to improve in the coming months.
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