The number of homes inherited in the first quarter rose 6 percent year-on-year to a record high of 11,700 units, with the figure set to rise further with a rapidly aging population, Sinyi Realty Inc (信義房屋) said.
The continued pickup in the number is in stark contrast with the sluggish housing market and merits careful study of property taxes for heirs planning to cash out, the nation’s only listed broker said.
“The fast-aging population is set to push the number of homes inherited higher, as more than 80 percent of Taiwanese own their own homes and most opt to pass their assets down to younger generations,” Sinyi researcher Tseng Ching-der (曾敬德) said in a recent report.
The National Development Council predicts Taiwan is set to become an “aged” society by 2018 — meaning 14 percent or more of its population are 65 or older, according to the UN’s definition.
According to some predictions, the nation is set to become a “hyper-aged” society by 2025 — meaning 20 percent of the population is 65 or older.
Homes inherited from this year onward are to be subjected to a new property levy that places a flat 10-percent minimum tax on property gains of more than NT$4 million (US$122,971).
The new measure would see heavy tax burdens imposed on sales of inherited homes because the transactions are free of acquisition costs and are subject to high income taxes, depending on how long the properties have been held and the gains made, Tseng said.
It is easy for long-held land and homes to meet the NT$4 million threshold given the sharp increase in property prices in popular districts of Taiwan over the past decade, Tseng said.
In the absence of actual cost figures, the taxation agency is to use lower government-assessed home and land values as the base against real trading prices to arrive at property gains, Tseng said, adding that Greater Taipei’s soaring home prices are set to ensure high property taxes.
Properties inherited last year or earlier may continue to use the previous property-tax regime, under which property gains are subjected to income tax rates of between 5 percent and 45 percent depending on income levels regardless of holding periods.
Inheritors should carefully weigh tax considerations when planning property decisions, Tseng said.
Property transactions totaled NT$278.9 billion in the first quarter, a decline of 16.9 percent from the same period last year, according to the government’s real-price registration Web site.
New Taipei City reported the highest total, with transactions totalling NT$43.6 billion, followed by Taipei with NT$32.8 billion and Taichung with NT$25.7 billion, government data showed.
Property funds might flow from Taiwan to Southeast Asia going forward, in line with the government’s “new southward policy” to diversify investment risks, Asia Pacific International Property (亞太國際地產) said, calling Thailand an ideal destination in light of its flourishing tourism industry and strategic location.
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