The Legislative Yuan yesterday passed amendments to income and housing tax laws, as well as the general budget before lawmakers took a break ahead of the Jan. 13 elections.
The changes to the Income Tax Act (所得稅法) increase the highest allowable tax deductions for rent from NT$120,000 to NT$180,000 (US$3,826 to US$5,740).
The changes also include provisions for granting deductions to parents raising children aged six or younger, up from five or younger.
Photo: Liao Chen-huei, Taipei Times
The child-raising tax deduction on a first child is to be increased to NT$150,000 per year, up from the NT$120,000, while the deduction on a second child is to be set at NT$225,000.
The eligibility limit excluding higher-income families from tax deductions for raising children has also been removed.
Lawmakers had proposed 12 versions of the amendments after criticizing the government’s policy for alleviating the economic pressure on families as inadequate.
Separately, amendments to the House Tax Act (房屋稅條例), which targets landlords and real-estate investors, are to raise taxes on 4.14 million houses and apartments, and generate revenue of NT$2.27 billion to NT$3.27 billion.
The bill now heads to President Tsai Ing-wen (蔡英文) and is expected to go into effect in July next year.
Residential properties are designated as self-use or non-self-use housing, with the latter category referring to any house or apartment owned by a person after the third one they have acquired, except for those inhabited by the homeowner, their spouse or their children.
Tax on non-self-use properties is to be raised to between 2 and 4.8 percent on a scale to be determined by local governments following Ministry of Finance standards.
Exceptions are made for properties that were inherited, rented or built, but went unsold.
Meanwhile, the tax rate on self-use housing is to be decreased to 1 percent if its value is less than an as-yet unspecified amount and the homeowner makes the appropriate household registration before March 22 next year.
The rate would be 1.2 percent for self-use housing utilized by a spouse or children.
A homeowner can designate up to three houses or apartments as self-use as long as they house the owner, their spouse or their children, and they do not rent to any tenants.
A Ministry of Finance official said that necessary changes are being made to accommodate the amended act so that it could be implemented on time.
The rule changes would include a tax formula for local governments to determine taxation rates on property and set a limit on the highest value allowable for self-use property to benefit from the reduced tax rate, the official said.
Rules for tax responsibility on properties with complex ownership, including inherited property or property held for rent, are still being written, they said.
Language allowing self-use housing to be leased for public welfare is to be deleted, as the amended act no longer permits such uses, the official said.
The ministry’s real-estate value assessment committee is to be reformed since elected local representatives are no longer allowed to serve on the board, the official said, adding that gender equality rules would also be implemented.
Meanwhile, the general budget for fiscal year 2024 provides NT$2.8519 trillion to fund the central government, representing a reduction of NT$29.9 billion, or 1.04 percent, from the government’s initial proposal.
It represents the highest government spending on record and an increase of 6 percent over the previous fiscal year, while the amount lawmakers cut was slightly lower than in past years.
The surge in spending originates from the government’s efforts to build infrastructure, transition the economy to net-zero carbon emissions, improve welfare and increase the birthrate, the Directorate-General of Budget, Accounting and Statistics said.
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