Amid public complaints about soaring property prices, the Taipei City Government said on Tuesday it would raise taxes on luxury apartments starting in July next year, with other cities and counties expected to follow suit. This “solution,” however, fails to address the critical problem of lack of affordable housing and at most, would only make a small dent in the income of owners of high-end properties.
Take a 245 ping (800m²) apartment at the upscale Treasure Palace complex in Taipei as an example, where the owner currently pays an estimated NT$150,000 in annual property taxes. Under the new regulations, wherein property taxes could rise by as much as three times, the owner will have to pay NT$450,000 starting next year. This is merely a drop in the bucket for owners who can afford to pay between NT$150 and NT$170 per ping per month, or nearly NT$500,00 per annum, in property management fees.
The tax hike also represents a disproportionately small rise compared with the surge in the property’s value, which has doubled to around NT$400 million since 2006, and could climb another 30 percent once Taipei signs an economic cooperation framework agreement (ECFA) with Beijing by the end of the year if domestic realtors’ forecasts hold true.
Even if the property’s value were to see only a minor 10 percent rise by the end of this year, a capital gain of NT$40 million from selling the property would still enable the owner to pay the city government’s new tax for another 100 years.
In the interest of equitable taxation, it is reasonable then for the city government to take back a small share of the property boom expected from President Ma Ying-jeou (馬英九) administration’s pro-China policies.
To promote a fairer tax system, some have called for the Ministry of Finance to impose a higher tax rate on incremental capital gains from high-end properties, although opponents of this proposition argue that this would hurt domestic consumption.
Other than tackling soaring high-end property prices, however, the government has failed to address more urgent issues that affect the general public.
Middle-market properties have also shot up in the past year on expectations that the ECFA would lift the economy. This is an issue that the government should have prioritized, but it has not provided any concrete measures except for plans to build an affordable housing project in Linkou (林口) in four years.
Debate is still raging on whether middle-income earners will benefit from signing an ECFA with China. Even if they do, the gains they make may not be enough to allow them to catch up with the soaring value of real estate. And their housing plight will only worsen if the ECFA undercuts their jobs and hurts the local economy.
The nation’s low-income families are the most vulnerable to the Chinese trade pact or any property boom. If the government is hoping that an ECFA would bring about a property boom similar to what happened in Hong Kong after it signed a closer economic partnership arrangement with China in 2003, it had better think ahead how it could keep the low-income families from further plunging into poverty as happened in Hong Kong, where 1.23 million people — or nearly 18 percent of its population — were living below the poverty line as of the first half of last year.
“History does not repeat itself, but it rhymes” (attributed to Mark Twain). The USSR was the international bully during the Cold War as it sought to make the world safe for Soviet-style Communism. China is now the global bully as it applies economic power and invests in Mao’s (毛澤東) magic weapons (the People’s Liberation Army [PLA], the United Front Work Department, and the Chinese Communist Party [CCP]) to achieve world domination. Freedom-loving countries must respond to the People’s Republic of China (PRC), especially in the Indo-Pacific (IP), as resolutely as they did against the USSR. In 1954, the US and its allies
Mainland Affairs Council Deputy Minister Shen You-chung (沈有忠) on Thursday last week urged democratic nations to boycott China’s military parade on Wednesday next week. The parade, a grand display of Beijing’s military hardware, is meant to commemorate the 80th anniversary of Japan’s surrender in World War II. While China has invited world leaders to attend, many have declined. A Kyodo News report on Sunday said that Japan has asked European and Asian leaders who have yet to respond to the invitation to refrain from attending. Tokyo is seeking to prevent Beijing from spreading its distorted interpretation of wartime history, the report
Indian Prime Minister Narendra Modi arrived in China yesterday, where he is to attend a summit of the Shanghai Cooperation Organization (SCO) with Chinese President Xi Jinping (習近平) and Russian President Vladimir Putin today. As this coincides with the 50 percent US tariff levied on Indian products, some Western news media have suggested that Modi is moving away from the US, and into the arms of China and Russia. Taiwan-Asia Exchange Foundation fellow Sana Hashmi in a Taipei Times article published yesterday titled “Myths around Modi’s China visit” said that those analyses have misrepresented India’s strategic calculations, and attempted to view
When Chinese President Xi Jinping (習近平) stood in front of the Potala Palace in Lhasa on Thursday last week, flanked by Chinese flags, synchronized schoolchildren and armed Chinese People’s Liberation Army (PLA) troops, he was not just celebrating the 60th anniversary of the establishment of the “Tibet Autonomous Region,” he was making a calculated declaration: Tibet is China. It always has been. Case closed. Except it has not. The case remains wide open — not just in the hearts of Tibetans, but in history records. For decades, Beijing has insisted that Tibet has “always been part of China.” It is a phrase
RSS