Real-estate transfers as gifts between spouses rose to a seven-year high last year as more families used the practice to avoid taxes, Taiwan Realty Co (台灣房屋) said yesterday.
Last year, the number of property transfers as gifts rose to 49,805, with transfers between spouses spiking more than 10 percent to 13,973, the highest in seven years, the broker said, citing Ministry of the Interior data.
Taiwan Realty research head Charlene Chang (張旭嵐) said the trend took off after local governments in Taoyuan, Hsinchu, Taichung, Tainan, Kaohsiung and Pingtung in July last year enacted “house-hoarding taxes” on people owning multiple homes.
Photo: Hsu Yi-ping, Taipei Times
Local administrators raised property taxes to between 1.5 percent and 3.6 percent on a fourth unoccupied home, compared with 1.2 percent for a self-occupied and the first three homes, to help curb property speculation that is widely blamed for high home prices across Taiwan.
The hoarding taxes are expected to generate an extra NT$1 billion (US$33.1 million), the Ministry of Finance earlier said.
The move prompted multiple-home owners to gift properties to their spouses, which explains why gift taxes last year grew only 1.7 percent despite a large increase in property gifts, Chang said.
Property transfers as gifts between spouses are exempt from gift taxes, which range from 10 to 20 percent depending on the value of the gift.
The government last year raised the gift tax exemption from NT$2.2 million to NT$2.44 million annually per person to reflect inflationary pressures, which helped weigh on gift tax gains, Chang said.
Under the exemptions, parents can give their children real-estate gifts worth NT$4.88 million a year without paying taxes, she said.
Gift real-estate transfers are exempt from property gains taxes unless the receiver resells the property.
Property gains taxes in December last year reached a record high of NT$5.47 billion, which was helped by the taxes being extended to presale home purchase agreements, said Sinyi Realty Inc (信義房屋), the nation’s only listed broker.
The levy, which was introduced in 2016, would allow sellers tax exemptions of NT$4 million for owning homes for six years before selling them, Sinyi research manager Tseng Ching-der (曾進德) said, adding that he advised against short-term speculation.
Sellers can also save taxes by filing for property gains tax returns if they buy new homes within a certain period to demonstrate that the transactions resulted from allocation needs, he said.
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