Luxury home sales pick up despite tax

By Crystal Hsu  /  Staff reporter

Tue, Nov 12, 2013 - Page 13

Sales of luxury homes have picked up rapidly in Taipei in the past 12 months, thanks to self-occupancy, relocation and asset allocation needs, property brokers said yesterday.

Transactions of expensive houses — priced NT$80 million (US$2.71 million) or more — staged a strong comeback in the first half of the year with second-quarter sales surging 124 percent from the first quarter, Evertrust Rehouse Co (永慶房屋), the nation’s largest real estate agency by number of outlets, said, based on figures published by the Ministry of Interior.

There were 183 luxury home deals as of Sept. 30 since the ministry put on line monthly transaction data in October last year, with climbing transactions for the past three quarters, despite soft economy and unfavorable policies, notably the special sales levy and selective credit control on upscale homes, Evertrust Rehouse said.

The special sales levy, also known as the luxury tax, subjects houses resold within two years of purchase to levies of up to 15 percent of trading prices, while mortgage loans are capped at 60 percent for houses priced at NT$80 million or more.

“People who can afford extravagant housing usually have deep pockets and will keep buying properties as they see fit, undaunted by unfavorable policies,” said Greg Yeh (葉國華), head of the luxury home division at Evertrust.

The real price registration measure introduced in August last year has lent support to transaction accountability and transparency as evidenced by the recovery in luxury home sales, Yeh said.

Taiwan Realty Co (台灣房屋) voiced similar views, saying poor economic visibility and uncertainty about the US quantitative easing has driven people with high net worth to invest part of their funds in real estate.

Various studies have shown real estate properties are relatively resilient against market volatility and inflation over the years, Taiwan Realty said, adding that luxury home transactions may strengthen toward the end of the year in line with the sector’s high season.

Different sections of Jenai Rd proved a favorite among luxury home buyers, accounting for 11 percent of deals, followed by Zhongshan N Rd at 8 percent, Evertrust said.

Zhongxiao E Rd and Xinyi Rd tied for the third place at 7 percent and Dunhua Rd came next with 6 percent, Evertrust said.

Xinyi Rd, in particular, has seen luxury home sales expanding 400 percent in the past year, which can be attributed to the upcoming completion of the MRT Xinyi Line, Evertrust said.