The Ministry of Finance and the Taipei City Government have reached a consensus to raise the housing tax on residential properties not occupied by the owner, in a bid to curb speculation and unreasonably high real-estate prices in the capital’s property market.
Taipei Deputy Mayor Chang Chin-oh (張金鶚) yesterday met with Minister of Finance Chang Sheng-ford (張盛和) to discuss the high housing prices, after Premier Jiang Yi-huah (江宜樺) vowed to reduce the home price to income ratio in the Greater Taipei area from 15.01:1 to 10:1 in two years.
“Under the cooperation established between the central and local governments, we are confident that the average cost of a housing unit [in the region] could be reduced by one-third in two years,” Chang Chin-oh told a press conference after leaving the ministry.
The two sides have agreed to expand the interval of the home tax rate on non-residential properties up to 3.6 percent and stipulate a more accurate definition of what constitutes self-use residences (properties not occupied by the owner).
Currently, local governments determine their own housing tax rate and all of them have adopted a rate of between 1.2 and 2 percent of a residential property’s value, which is the range set by the central government.
The Taipei City Government has also agreed to help facilitate the activation of state-owned land and accelerate the pace of urban renewal to boost supply.
Meanwhile, the city government suggested that the ministry take the lead in amendments to the holding tax for homes and land proposed with the aim of taxing property owners according to the market price of the real estate they own, Chang Chin-oh said.
Other than the two major consensuses reached yesterday, the city government wants the ministry to give some tax privileges to legal landlords, to encourage them to report the leasing of their properties with the aim of expanding the residential rental market in Greater Taipei.
Chang Sheng-ford said the ministry is scheduled to hold several conferences in the summer to gather opinions on amending the property holding tax in a bid to reach more consensuses and learn from the failures of past property tax reforms.
However, the minister added that many of the changes to the housing tax require the legislature to pass amendments related to taxing laws, indicating that none of the consensuses reached between the ministry and the city government will be easy to execute.
In addition, Chang Sheng-ford reiterated that moves affecting the housing market have to made carefully and gradually to preserve economic stability.
The legislature’s Finance Committee is to review various draft amendments to the House Tax Act (房屋稅條例) and the Land Tax Act (土地稅法) that have been proposed by lawmakers today.