The Cabinet yesterday gave the go-ahead to measures to restrict favorable lending terms for first-home purchases to once per person and require borrowers to sign an affidavit stating the house is intended for self-occupancy.
The tightened requirements came amid rising concerns over dummy buyers and misuse of loans, as mortgage operations have soared to new highs and home prices have increased by double-digit percentage points across Taiwan.
“The restrictions will go into practice immediately,” Deputy Minister of Finance Frank Juan (阮清華) told a media briefing in Taipei, adding that state-run lenders would closely review loan applicants to root out dummy buyers and property investment.
Photo: CNA
Surveys have showed that favorable lending terms introduced in August last year have revived a property boom, as they allow first-home buyers an interest rate of 1.775 percent, a five-year grace period and mortgages of up to 40 years.
Investors and wealthy people have allegedly used dummy buyers, including their children, to take advantage of the program designed to help people with real demand to buy a home, Juan said.
State-run lenders would tighten reviews of loan applications from the same household and ask borrowers to pledge that they would not lease the house, which would be against the self-occupancy requirement, he said.
People found to have contravened the rules would have their interest subsidy revoked and must return the difference, he said.
Furthermore, favorable lending terms are limited to once per person, meaning that those who sell a home purchased under the program would not qualify to apply again, Juan said.
As of May 31, the program had aided 57,980 house purchases, with combined mortgages totaling NT$428.1 billion (US$13.16 billion), the ministry said.
Houses valued at under NT$15 million accounted for 78.2 percent of the deals, while 72.99 percent of the people who took out the mortgages were 40 or younger, implying that the program effectively benefitted target buyers and should not be held responsible for rising house prices, Juan said.
Mortgages of 31 to 40 years constituted 50.01 percent of homes bought under the program, while floor areas of 16 ping to 45 ping (48.9m2 to 148.8m2) accounted for 67.76 percent of the homes, he said.
The interest subsidy had cost the state coffers NT$1.78 billion and the government would set aside more money to sustain the program until it expires in 2026, Juan said.
State-run lenders have identified suspect cases and would crack down on abuse of the program, he added.
Real-estate brokers said that the three-year interest subsidy and five-year grace period provide sufficient room for profit-taking for people who cannot afford mortgages.
DETERRENCE: With 1,000 indigenous Hsiung Feng II and III missiles and 400 Harpoon missiles, the nation would boast the highest anti-ship missile density in the world With Taiwan wrapping up mass production of Hsiung Feng II and III missiles by December and an influx of Harpoon missiles from the US, Taiwan would have the highest density of anti-ship missiles in the world, a source said yesterday. Taiwan is to wrap up mass production of the indigenous anti-ship missiles by the end of year, as the Chungshan Institute of Science and Technology has been meeting production targets ahead of schedule, a defense official with knowledge of the matter said. Combined with the 400 Harpoon anti-ship missiles Taiwan expects to receive from the US by 2028, the nation would have
POSSIBILITIES EMERGE: With Taiwan’s victory and Japan’s narrow win over Australia, Taiwan now have a chance to advance if South Korea also beat the Aussies Taiwan has high hopes that the national baseball team would advance to the World Baseball Classic (WBC) quarter-finals after clinching a crucial 5-4 victory over South Korea in a nail-biting extra-inning game at the Tokyo Dome yesterday. Boosted by three home runs — two solo shots by Yu Chang (張育成) and Cheng Tsung-che (鄭宗哲) and a two-run homer by Stuart Fairchild — the triumph gave Taiwan a much-needed second victory in the five-team Pool C, where only the top two finishers would advance to the knockout stage in Miami, Florida. Entering extra innings with the game tied at four apiece, Taiwan scored
MISSION OF PEACE: The foreign minister urged Beijing to respect Taiwan’s existence as an independent nation, and work together to ensure peace and stability in the region Minister of Foreign Affairs Lin Chia-lung (林佳龍) yesterday rejected Chinese Minister of Foreign Affairs Wang Yi’s (王毅) comments about Taiwan, criticizing China as a “troublemaker” in the international community and a disruptor of cross-strait peace. Speaking at a news conference on the sidelines of the Chinese National People’s Congress, Wang said that Taiwan has always been a territory of China and that it would be impossible for it to become its own country. The “return” of Taiwan to China was the natural outcome of the Chinese people’s resistance against Japan in World War II, and that any pursuit of independence was “doomed
‘UNWAVERING FRIENDSHIP’: A representative of a Japanese group that co-organized a memorial, said he hopes Japanese never forget Taiwan’s kindness President William Lai (賴清德) yesterday marked the 15th anniversary of the Tohoku earthquake and tsunami, urging continued cooperation between Taiwan and Japan on disaster prevention and humanitarian assistance. Lai wrote on social media that Taiwan and Japan have always helped each other in the aftermath of major disasters. The magnitude 9 earthquake struck northeastern Japan on March 11, 2011, triggering a massive tsunami that claimed more than 19,000 lives, according to data from Japanese authorities. Following the disaster, Taiwan donated more than US$240 million in aid, making it one of the largest contributors of financial assistance to Japan. In addition to cash donations and
RSS