The Legislative Yuan yesterday passed a series of measures aimed at curbing speculation on the real-estate market, including proposals to tighten oversight of pre-sold houses and increase public reporting requirements.
One of the measures requires the public disclosure of the price and full address of all real-estate transactions in the nation — an improvement on the current system, which only lists the approximate locations of properties.
The other four proposals had to do with pre-sold homes, which, in a practice known as house flipping, are often purchased by investors and then quickly resold for a profit, driving up prices.
Under the changes, the government would prohibit the re-sale of “purchase orders” for pre-sold houses to third parties, with breaches subject to fines of NT$150,000 to NT$1 million (US$5,262 to US$35,079).
The purchase orders, known as “red orders,” are obtained after paying a deposit on a pre-sold house to reserve a unit, but before a formal purchase contract is signed.
Speculators try to get these “red orders” early in the rollout of a new project and then sell them to a third party as the prices go up.
If they cannot sell them, the speculators can cancel the orders and get their deposits back.
The new measure is aimed at curtailing such speculation.
To improve pricing transparency, real-estate agents hired to sell pre-sold houses would have to report each transaction within 30 days of the sale, rather than reporting them in bulk within 30 days of the signing of the sales contract.
The measures would empower the government to probe suspicious transactions by requesting documents directly from financial institutions and government agencies. It could impose fines on those who fail to report or falsely report sales within the allotted time.
The measures were proposed by the Cabinet earlier this month. They passed their third reading and are to become law, pending approval by President Tsai Ing-wen (蔡英文).
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