The number of property transfers for gift and inheritance reasons is likely to hit a new high this year as increasing holding costs drive people to pass on real estate to younger generations, analysts said.
Gift-giving accounted for 28,295 property transactions during the January-to-June period during which another 23,302 properties were inherited, according to data released by the Ministry of the Interior. The figures represented more than 50 percent of the full-year levels of 51,683 and 44,143 seen last year.
However, overall property transactions plunged 30 percent during the same period from a year earlier.
“Property transfers as gifted or by inheritance appears to be on the rise as unfavorable policy measures have cooled down the housing market,” said Jessica Hsu (徐佳馨) H&B Realty Co (住商不動產), the nation’s largest real-estate broker by number of franchises.
Hsu attributed the trend to tax-saving incentives, which might play an increasingly important role in housing transactions.
Houses resold within two years of purchase are subject to a special sales levy of up to 15 percent of the transaction price, while gift and inheritance taxes stand at 10 percent of a lower, government-assessed property value, Hsu said.
Because real estate that is inherited or given as a gift is not subject to the special levy, better known as the luxury tax, more and more people are taking advantage of this to make tax-saving property investments, Hsu said.
Property transfers in the disguise of gifts or inheritance are widely touted as a remedy to the luxury tax and are gaining popularity among property investors, property administration agent Yang Chun (楊珺) said.
The increasing amount of property apparently given away as gifts has drawn the attention of taxation authorities, especially in cases involving luxury homes, Yang said.
Regardless, Taiwanese have a penchant for passing real estate on to their children, though the next generation prefers cash, a CTBC Bank (中信銀) survey found last week.
Real-estate property tops the choice of inheritance tools among two-thirds of the nation’s senior respondents, polled in the survey.
Taipei residents contributed the most to gift-linked property transactions at 5,514 deals in the first six months, followed by New Taipei City residents at 5,375 transfers, government data showed.
There were 3,489 housing transactions attributable to gift-giving in Greater Taichung, compared with 6,243 for the whole of last year.
“Tax-saving benefits appeal to people in all parts of the nation,” Hsu said.
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