Property developers, brokers and academics yesterday lent support for a proposed income tax on property transaction gains, although they disagreed about tax rates and exemption qualifications, Minister of Finance Chang Sheng-ford (張盛和) said.
Chang made the statement after a public hearing in Taipei on the draft integrated house and land sales tax.
“A social consensus has formed that income taxes on property gains are desirable and necessary to strengthen the nation’s taxation system and curb property speculation,” Chang told reporters after the last of three public hearings held to rally support for the levy.
The ministry would not recommend revisions to the draft the Cabinet unveiled last week, which the Cabinet is to send to the legislature in the hope it can become law before lawmakers recess for their summer break, the minister said.
As land value increment tax is protected by the Constitution, the new levy would allow tax deductions to avoid double taxation, Chang said.
“While the proposed tax is not perfect, it is more reasonable than existing ones,” he said.
Representatives from the construction industry favored lower tax rates, but said the draft was acceptable to end policy uncertainty, which may pose the worst situation for the market, he said.
The proposal calls for income tax rates of between 15 percent and 45 percent on gains from selling houses or land, depending on the duration of ownership.
Properties sold within one year of purchase would be subject to a tax rate of 45 percent of gains and the rate would ease to 35 percent for properties owned for two years, 20 percent for 10 years and 15 percent for ownership in excess of a decade, according to the proposal.
The plan would offer a tax break of NT$4 million (US$130,370) on gains from sales of homes that have been self-occupied for more than six years.
The tax rate is a flat 17 percent for corporate sellers, but 45 percent for foreign firms if the property is sold within one year of purchase and 35 percent for longer ownership, the proposal states.
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