The legislature’s Finance Committee yesterday approved bills that would raise property taxes, making it more difficult to make a profit from short-term property transactions, including transfers of presale projects and shares.
The bills would subject houses sold within two years of purchase to combined property taxes of 45 percent, while the taxes would be 35 percent on houses sold within five years of purchase.
The bills would impose a stricter definition of “short-term” transactions, from two to five years, and also include transfers of presale projects and equities to close tax loopholes often used by corporate owners.
Photo: Peter Lo, Taipei Times
“The effort to promote housing justice gains headway today, even though there is still ample room for improvement,” Chinese Nationalist Party (KMT) Legislator Lai Shyh-bao (賴士葆) said.
The bills do not impose higher taxes on multiple home owners, which analysts have said would be more effective in curbing property hoarding.
Government data show that more than 13,000 companies and 80,938 individuals own more than four properties, and that together they own 14 percent of homes nationwide.
House prices rose significantly last year, especially in central and southern Taiwan, on the back of ultra-low interest rates and excessive liquidity.
A majority of companies sell a property within one year of the purchase, the government has said.
The bills need to clear the legislature, with lawmakers divided on when the new tax rates should be implemented pending further cross-party negotiations.
Minister of Finance Su Jain-rong (蘇建榮) reiterated his wish that the Executive Yuan be given the final say on the implementation date, as such matter requires coordination between ministries.
The ministry expects the revisions to slow housing transactions by 30 percent.
Some lawmakers favor a quick implementation on July 1, along with a new requirement that housing transaction details include the number of the building, rather than just the neighborhood.
The combined tax rate would be 20 percent when selling a property more than than five years after it was purchased. A 10 percent rate for self-occupied homes, held for more than six years, would remain.
The punitive tax rates of 35 and 45 percent also apply to foreign individuals and corporations, as well as share transfers among unlisted firms.
Shining Building Business Co (鄉林建設) chairman Lai Cheng-i (賴正鎰) said that the bills would “play havoc” with the property market, contrary to the government’s efforts to boost the economy.
Companies shifting their production bases home from overseas have been more responsible for property price rises, Lai said.
Supply chain realignment has also led to higher labor costs and price increases of building materials, and developers have had to pass on the burden, he said.
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