Mon, Jul 18, 2016 - Page 1 News List

Deputy minister of finance rejects claim that House Tax Act is unconstitutional

By Kuo Chia-erh  /  Staff reporter

Deputy Minister of Finance Su Jain-rong (蘇建榮) yesterday said that the House Tax Act (房屋稅條例) does not contravene the Constitution, in response to former premier Sean Chen’s (陳冲) criticism of the law.

In an article published yesterday in the Chinese-language United Daily News, Chen wrote that owners of residential properties should not be taxed, because, according to the Constitution, people should not be taxed for their basic living rights.

Premier Lin Chuan (林全) should abolish or lower the house tax rate, and taxpayers should lobby legislators to take action if the government does nothing, Chen wrote.

Su said that based on a legal interpretation by the Justices of the Constitutional Court, the act is not unconstitutional and taxes accrued from it can be used to fund local infrastructure projects.

With this tax, local governments can provide more facilities and house owners can enjoy better services, which in turn lead to higher house prices over the long term.

Su said that following the “beneficiary pays” principle, house owners should pay taxes.

Deputy Minister of the Interior Hua Ching-chun (花敬群) yesterday on Facebook ridiculed Chen’s article.

Hua wrote that the legal interpretation shows that the act does not violate the Constitution.

“As a former premier, Chen’s opinion is ridiculous,” Hua wrote.

Since the tax base of the house levy and the standard value of houses set by local governments have not been adjusted in more than 30 years, they are the reasons that many local governments run fiscal deficits, Hua added.

The house tax has been one of the main sources of income for county or city governments.

According to the legislation, house taxes should be levied according to tax rates and the current value of a house, which is assessed by local governments.

Local governments also set a standard on the value for types of properties by structure and number of floors.

According to the law, the tax rate for owner-occupied properties used for residential purposes should be 1.2 percent, while it ranges from 1.5 percent to 3.6 percent for non-owner-occupied residential properties.

Properties used for commercial purposes are subject to tax rates from 3 percent to 5 percent.

The actual house tax rates are decided by local governments.

In addition, the law stipulates that current values of houses depend on standard values, which should be assessed by the real-estate assessment committees of local governments, and that the standard values of properties should be reassessed once every three years.

In a bid to eliminate their fiscal deficits, 12 local governments are planning to raise the standard values of properties, the Ministry of Finance said earlier this year.

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