Taiwan Delays Progressive Property Tax

by Mary Swire, Tax-News.com, Hong Kong

01 April 2010

The implementation of a plan to make the current housing tax progressive, which was to have been part of an effort to redistribute the tax burden in Taiwan, has been delayed by the government.

The proposal to replace the current uniform rate with several levels of tax, dependent on value, had only been announced in the middle of March. The present flat housing tax rate of 1.2% would have remained for properties valued at up to TWD1m (USD31,500) but, for properties with higher valuations, the rate would have risen progressively, until a tax of 1.8% would have been levied on luxury properties valued at over TWD8m.

It has been argued that, while the new higher tax rates would only have been imposed on less than 3.5% of Taiwan’s homeowners, the new housing taxes would have been fairer than the present flat rate.

The Ministry was to have obtained approval from interested stakeholders, including the local governments that would continue to collect the tax, so that the new rates could be presented to parliament in April this year, and be introduced in 2012.

There was some opposition to taxation being raised at a time when the economic recovery was still not assured, and the government has now confirmed that it is still examining the proposal for introduction sometime in the future. It is, however, believed that some local governments are continuing to pursue the tax increases as a possible means of restraining the sharp speculative increases in property prices in their areas.

Recommended