Statistics compiled by the Fiscal Information Agency showed that from 2013 to 2019, the number of people who together with their spouse and minor children own four or more residential properties rose by 47,000 from 268,000 to 315,000.
The number of properties owned by multiple homeowners, who are subject to a local house-hoarding tax according to Ministry of Finance criteria, rose by 240,000, from 1.4 million to 1.64 million.
The numbers of multiple homeowners and their properties both increased by about 18 percent.
Furthermore, one-quarter of the 1.06 million new homes sold during that time were acquired by multiple homeowners. This means that less than 4 percent of the population owns 14 percent of all residential properties, which shows that house hoarding is an increasingly serious problem.
House-hoarding conceals the reality of an oversupply on the residential property market and prevents the real demand for owner-occupied homes being met. This is a blow to housing justice.
On Dec. 8 last year, the central bank instituted four credit control measures to target the issue. Two days later, the Ministry of the Interior proposed its “actual transition price registration 2.0” policy, which was approved by the legislature in January and could be implemented as early as July.
This policy would reveal complete information on housing properties and land lots. It would require prompt declaration of presale transactions and bring presale properties fully within the ministry’s purview. It would also impose heavier penalties and prohibit transfer sales of presale reservation receipts.
These measures are an important first step to curb real-estate speculation.
However, the main reason for house-hoarding and the concentration of wealth is the low cost of owning vacant real estate.
The measures would have only a limited effect on investors who are already hoarding buildings and land, as they cannot rein in property already owned by multiple homeowners.
On May 20 last year, Deputy Minister of the Interior Hua Ching-chun (花敬群) wrote on Facebook that a house-hoarding tax is an ineffective and mistaken proposal.
How can anyone say that a nationwide house-hoarding tax would be ineffective when housing prices in downtown Taipei fell immediately after the city government imposed such a tax in 2014?
The biggest hindrance to the implementation of a house-hoarding tax by local governments is that they have no way of knowing how many properties an individual owns nationwide.
If a person owns no more than three residential properties in each of several cities or counties, then they can own four or more properties nationwide, without being known to local tax departments as multiple homeowners subject to a house-hoarding tax. Consequently, local governments’ revenue from house-hoarding taxes is currently negligible.
To make it more feasible to levy such taxes, observers have long suggested that the finance ministry should provide local governments with nationwide real-estate ownership data and allow multiple homeowners to decide which of their properties should be counted as non-owner-occupied housing units. Local governments could easily levy a home-hoarding tax on those properties.
Whether such proposals can be implemented depends on whether the finance ministry is willing to institute a tax reform. If it does, it would allow housing justice to take a big step forward.
Wei Shih-chang works in the information industry.
Translated by Julian Clegg
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