Housing transactions in the nation’s special municipalities soared 56.4 percent last month from a year earlier, as buyers and sellers rushed to close deals before a new property tax takes effect this month.
Property transfers last month totaled 36,433 units in Taipei, New Taipei City, Taoyuan, Taichung, Tainan and Kaohsiung, a steep 56.4 percent increase from December 2014 and more than double from the level in November last year, according to data published by local governments on their Web sites on Monday.
Analysts attributed the spike to last-minute attempts by sellers and buyers to avoid taxes, as the new property tax subjects transaction gains to income taxes of between 15 percent and 45 percent, depending on how long a property is held.
“Developers and builders accelerated transfers at the end of the year to meet customers’ demands, as houses resold this year are to be subject to income taxes based on actual transaction gains,” Evertrust Rehouse Co (永慶房屋) assistant manager Chung Yin-lin (鍾穎麟) said.
Housing deals in Taichung, Tainan and Kaohsiung established record-highs since the launch of the transaction survey in 1999, and jumped to 15-year highs in Taipei and New Taipei City, official statistics showed. The number of deals also advanced to the highest level since 2003 in Taoyuan.
The surge was at variance with sluggish trading typically observed in the run-up to national elections and policy changes, Chung said.
In Taipei, transactions jumped 79.9 percent year-on-year to 5,497 units last month, even though the capital has been hardest hit by unfavorable taxes. The city imposes extra luxury taxes on upscale home owners, the main beneficiaries of improved public infrastructure.
New Taipei City saw transactions jump 39.8 percent annually to 7,754 units, as many people move out of Taipei, where owning a home has become increasingly expensive.
Sinyi Realty Inc (信義房屋), the nation’s only listed property broker, expects last month’s rebound to be an isolated incident, saying transactions might remain light this month and ahead.
“Now that homeowners have to hold on to property longer to enjoy lower tax rates for property gains, sentiment might remain weak,” Sinyi researcher Tseng Chin-der (曾進德) said.
For the whole of last year, transactions might reach 290,000 after surpassing 245,000 in the first 11 months, Tseng said.
The six municipalities saw annual transactions shrink 6.62 percent to 16.5 percent last year, Tseng said, adding that they account for 80 percent of transfers in the nation.
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