Sat, Apr 18, 2015 - Page 13 News List

Taipei property taxes to rise up to 3.6%

SPECULATION SUPPRESSANTS:The highest rate of property tax in Taipei will be 3.6%, with the measures affecting about 13% of the city’s homes, an official said

By Crystal Hsu  /  Staff reporter

More than 140,000 houses in Taipei are to be taxed at a significantly higher rate starting next month, as the Taipei City Government has raised property taxes on owners of luxury homes or multiple houses, in a continuing bid to curb speculation.

The legislature in May last year approved amendments to the House Tax Act (房屋稅條例) that saw taxes raised on residential houses not occupied by their owners.

The amended act allows local authorities to raise taxes on homes that owners do not live in by between 1.5 and 3.6 percent from next month, from the current range of between 1.2 and 2 percent.

The tax hikes are adding to the woes of the luxury home sector, which has virtually come to a standstill amid unfavorable policy moves.

Taipei Mayor Ko Wen-je (柯文哲) said earlier that the city’s home owners might get a shock when they receive their property tax bills next month.

In Taipei property taxes on investors are to be raised from 1.2 percent to between 2.4 percent and 3.6 percent of assessed value.

About 13 percent of Taipei’s 1.23 million houses are set to see a higher tax bill, Taipei Revenue Service director Huang Su-jin (黃素津) said.

“For the first time, property tax bills of more than NT$1 million (US$32,090) are to be sent to 40 homes, with the highest tax bill being NT$2.7 million,” Huang said.

The house that will recieve this is on Dunhua S Road and the owner has multiple homes, city government data show. For those who own three houses or more, the property tax 3.6 percent in Taipei.

Luxury homes also have to pay extra taxes for their locations — which have seen the most benefit from public investment in infrastructure. In addition, the city government more than doubled the assessed value of upscale houses with new occupancy permits — issued from July 1 last year onward — in a further bid to increase holding costs and rein in wayward prices.

The growing tax burdens are driving up the supply of luxury homes, but buying interest remains low in the absence of concrete concessions over price, Sinyi Realty Inc (信義房屋) said.

Luxury homes — valued at NT$8 million or more — account for 6.4 percent of houses on sale, a record high, while deals closed for these types of property account for a tiny 1.8 percent, Sinyi researcher Tseng Chin-der (曾進德) said.

“Bigger price concessions are necessary to end the surplus supply of luxury homes,” Tseng said.

It takes six to seven months to sell upscale houses, as they are beyond the means of ordinary people, Tseng said.

Property tax rates are to remain unchanged at 1.2 percent for owner-occupied houses — which account for almost 90 percent of the total.

Former Taipei deputy mayor Chang Ching-oh (張金鶚), a vocal critic of soaring housing prices, who initiated the tax hikes, said it is reasonable that multiple-home owners pay more taxes, as they have deeper pockets.

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