Taiwan To Introduce Progressive Housing Tax

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

16 March 2010

As part of an effort to cool a speculative boom in property prices in Taiwan, the Ministry of Finance proposes to make the current housing tax progressive, by replacing the current uniform rate of with several levels of tax, dependent on value.

It was disclosed by the Deputy Minister of Finance, Chang Sheng-ford, that the present flat housing tax rate of 1.2% would remain applicable for properties valued at up to TWD1m (USD31,400) but that, for properties with higher valuations, the rate would rise progressively.

It is suggested that homes with a valuation between TWD1m and TWD4m would be subject to a tax of 1.3%; those with a value between TWD4m and TWD8m would receive a 1.5% rate; and a tax of 1.8% would be levied on luxury properties valued at over TWD8m. In addition, there would be increases to property taxes on commercial properties.

It was said that, while the new higher tax rates would be imposed on only less than 3.5% of Taiwan’s homeowners, the new housing taxes would be fairer than the present flat rate. If the Ministry obtains approval from interested stakeholders, including the local governments that would continue to collect the tax, they are proposed to be presented to parliament for approval next month, and be introduced in 2012.

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