The central bank on Thursday further tightened restrictions on mortgage loans to curb housing speculation, as domestic banks’ real-estate financing has continued to increase. It capped the loan-to-value ratio at 40 percent for corporate entities, 55 percent for individuals buying their third home and 50 percent for those buying their fourth home. The goal is to stem a deluge of loans into the real-estate sector and rein in credit risks.
The central bank also capped the loan-to-value ratio at 55 percent for idle industrial land, and said it would monitor the developments in the nation’s housing market and local banks’ management of credit risks related to real-estate financing.
The new measures took effect on Friday and the central bank said it would make adjustments if necessary.
The move is clearly aimed at property speculators, primarily those who flip presale housing units. The bank said individuals and businesses that own more than four properties are the main targets of its new measures, while market watchers said investment firms that buy and sell properties rapidly are especially targeted.
About 54.51 percent of non-real-estate corporate entities sold their properties within a year of purchase, data compiled by the Ministry of the Interior show.
The central bank’s latest credit controls came a week after the Executive Yuan approved a draft amendment to the Income Tax Act (所得稅法) to impose heavier taxes on properties sold within certain periods after purchase to rein in speculation in the market. For instance, individuals and businesses would face a 45 percent tax on property transaction gains involving homes or land sold within two years of purchase, and a 35 percent tax on homes or land sold within two to five years of purchase. The bill was on Friday sent to the legislature’s Finance Committee for review.
The government’s measures have so far been aimed at raising the cost of short-term property transactions, while it has stopped short of imposing higher taxes on house hoarding. As long as owners are in no hurry to sell their properties — especially wealthy people who own multiple houses as well as developers and financial consortiums that have a lot of properties — they can avoid the increase in the capital gains tax.
On the other hand, imposing higher housing and land value taxes could raise costs for wealthy people and companies, dampening their appetite for hoarding houses on a long-term basis.
However, the real issue is not whether raising housing taxes would curb property hoarding, but whether a higher tax rate would encourage owners of multiple houses to put some of them back on the market or whether it would keep housing prices from rising.
There is already a provision for a hoarding tax for people who own more than one property, with rates for owner-occupied or self-use properties set at an annual rate of 1.2 percent and those for non-owner-occupied residential properties ranging from 1.5 percent to 3.6 percent, subject to the local government’s judgement, according to the House Tax Act (房屋稅條例). Unfortunately, the tax is only levied in Taipei, and Yilan and Lienchiang counties.
There is still a long way to go before the nation implements a higher housing tax nationwide, as this would require cooperation between central and local governments.
The housing market varies regionally, according to socioeconomic conditions. Levying a universal house hoarding tax might solve the problem of vacant houses in big cities, but create new problems in smaller localities. It could help curb property speculation, but it might also make the problem more complicated across the nation.
When Taiwan Semiconductor Manufacturing Co (TSMC) in 2022 unveiled plans to begin building a new chip fabrication facility in Japan and start production this year, it looked like an implausibly aggressive schedule. Chip plants often take three years to complete, and, although the firm had moved faster on its own turf, this would be its first such attempt in Japan — where it would have to navigate foreign bureaucracies and regulations. However, on Saturday, TSMC officially opened its Kumamoto fab, putting it on track to begin mass production later this year. The ribbon cutting marks an early victory for Japan as
When Beijing says “Taiwan has always been an inalienable part of China” and calls this “an indisputable legal and historical fact,” it promotes a claim that has absolutely no basis in international law or history. But by aggressively stating that claim time and again over the years, it has made many in the world believe that fiction, especially when the dominant Western media outlets are reluctant to challenge the Chinese narrative. Indeed, some international publications now use the phrase “reunify” without quotation marks while referring to Beijing’s Taiwan goal. The truth is that Taiwan, for most of its history, had no relationship
At a gathering held by the Chinese Communist Party (CCP) and the Chinese State Council during this year’s Spring Festival, Chinese President Xi Jinping (習近平) reviewed the achievements of the past year. “Good scenery on this side only” (風景這邊獨好), he said about the global situation. The phrase comes from late Chinese leader Mao Zedong’s (毛澤東) poem Qing Ping Le (清平樂), written when he lost power in 1934. It was full of the “Ah-Q” (阿Ｑ) spirit of self-deception. Did Xi not know about this history, or was it a trap laid by his aides? Originally, the Third Plenary Session of the 20th Central
Amid the intensifying Sino-US strategic rivalry, Beijing has become more vocal about its coercive “wolf warrior” diplomacy. Chinese President Xi Jinping (習近平) condemned the US-led “containment, encirclement and suppression of China” at last year’s annual National People’s Congress in Beijing. Xi went on to say that China must “have the courage to fight” in the face of complicated changes at home and abroad. Taiwan is still a very sensitive subject for US-China relations. Chinese Central Foreign Affairs Commission Director Wang Yi (王毅) emphasized that Taiwan was “China’s internal affair” and reiterated that “Taiwan is part of China” during his talk last month with