Government land assessments should be adjusted to reflect market prices, Housing Movement activists said yesterday.
“The current ‘estimated price’ is just cooking the books,” National Association of Real-Estate Attorneys honorary board chairman Lin Wan-ken (林旺根) said. “We recommend that assessment committees be returned to the hands of professionals.”
While the average publicly assessed value of land is set at 90 percent of market value, assessment committees use distorted formulas to get around the restriction, he said, attributing the undervaluation to the presence of “pressure groups” — particularly city and county councilors — on the committees.
“Every three years, when the time comes to adjust assessments, public perception is taken into consideration for certain areas, that is, cities and counties that have seen a relatively large increase [in market prices],” property appraiser Chen Pi-yuan (陳碧源) said. “No one is willing to alienate residents with an overly large increase in taxes, so they choose to substantially underestimate [real-estate values], creating financial difficulties for local governments.”
Current assessment rules only call for consideration of the “legal volume” of any building constructed, ignoring the presence of “volume rewards,” which can greatly increase the actual height of the structures constructed, Chen said.
Democratic Progressive Party Legislator Chen Chieh-ju (陳節如) said assessment committees also deliberately choose land with older and less valuable buildings to serve as the basis for estimates of property values in the surrounding area, and toy with estimated values by subtracting “refurbishing” and “equipment” costs.
The value of tax-exempt land — such as fields and cropland — is in turn artificially inflated to bring the average value of land assets close to the 90 percent of market value benchmark, she said.
Because of underassessment, the effective tax rate on land is less than one-10th of rates in Japan and the US, coming to only between 0.1 and 0.2 percent of market value, Chen Pi-yuan said.
Low rates encourage land-hoarding, with owners choosing not to build in hopes of benefiting from rising property values, he said.
Tsuei Ma Ma Foundation for Housing and Community Service chief executive Lu Ping-yi (呂秉怡) said that in one case, the land and property taxes for an apartment worth NT$40 million (US$1.22 million) on Taipei’s Fuxing S Road were lower than the combined license plate fees and gas taxes paid yearly for a large sedan.
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