The Executive Yuan yesterday approved a draft bill to restrict transfers of presale and new housing contracts, and to impose heavy fines of up to NT$50 million (US$1.73 million) on unfair promotions of real-estate properties.
The move came one week earlier than expected, after housing prices picked up steeply across Taiwan in the past two years.
The draft amendment to the Equalization of Land Rights Act (平均地權條例), proposed by the Ministry of the Interior, still needs to clear the legislature before taking effect.
Photo: CNA
The draft bill aims to severely punish real-estate speculation, maintain order in the real-estate market and protect the rights of home buyers, the Executive Yuan said in a statement.
The bill proposes countermeasures against improper speculation such as reselling or transferring presale or newly built housing contracts, the statement said.
It also offers whistle-blower rewards for tips leading to crackdowns.
The draft bill would limit transfers of presale and newly built housing contracts to spouses, family members and second-degree relatives of buyers, but exceptions would be made for transfers necessitated by drastic changes in a buyer’s financial situation, occupation or family emergencies, the ministry said.
Presale transactions last year totaled 93,402 units, generating NT$1.28 trillion in sales, or NT$13.66 million per unit, Sinyi Realty Inc (信義房屋) said, citing data from the government’s real-price disclosure Web site.
Taoyuan recorded the highest number of presale transactions at 19,879 units, followed by Taichung with 16,730, New Taipei City with 16,431 and Kaohsiung with 10,531, the data showed.
The ranking was roughly the same in terms of trading value.
Analysts said that presale transactions might flounder this quarter following the Executive Yuan’s approval of the draft bill.
“The bill is aimed at presale housing projects, which have become the main target of speculation in recent years,” Sinyi research manager Tseng Ching-der (曾進德) said.
Investors eyeing short-term gains would flee the market to avoid losses until buyers with real demand dominate the market again, Tseng said, adding that the change would not be all negative, as it might help housing prices to stabilize.
Presale transactions might slow this quarter, but developers are not likely to concede on housing prices given soaring labor and building material costs, Great Home Realty Co (大家房屋) lead researcher Mandy Lang (郎美囡) said.
Low interest rates and ample liquidity helped facilitate speculation in presale homes, as it requires a small amount of capital, Lang said, adding that the situation should change after the central bank raised interest rates last month and could tighten further to curb inflation.
Jessica Hsu (徐佳馨), research chief at H&B Realty Co (住商不動產), questioned the proposed whistle-blower bonus, saying it could encourage loose crackdowns on the part of tax and auditing officials.
The draft bill would subject unfair and misleading property ads via physical and online channels, and would provide whistle-blowers with monetary awards.
In addition, it would require companies to obtain regulatory approval before buying real-estate properties.
Hsu said that property purchases intended to create social and entertainment venues or save tax expenses should not be deemed as property speculation.
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