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Taiwan Passes Multiple-Transaction Property Tax

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

15 December 2009


Taiwan’s parliament has passed legislation by the government to abolish the limit on the number of times that homeowners can utilize the preferential rate of tax on the increased value when selling their properties.

Under current regulations, Taiwan’s landowners, who have held the property for their own personal use, benefit from a preferential land value incremental tax rate of 10% (instead of the usual 20%-40%, dependent on the scale of the taxable gain) when selling their property, but only once in their lifetime.

The amendment allows an unlimited number of uses of the preferential land value incremental tax rate to homeowners who have had their registered domicile at the property for a minimum of six years; additionally, the property should not have been rented or subject to business use over the previous five-year period. Furthermore, neither the property owners nor their direct families should own other properties at the time of the sale.

The 10% tax rate will only apply to urban land values of less than about 146 square meters, or non-urban land of less than 347 square meters. Land areas exceeding those limits will still be subject to the usual higher land incremental value tax rates.

The government said the relaxation of the tax regulations will enable several million homeowners to benefit from the reduced tax rate when trading up the property ladder to accommodate growing families. It is expected that, while there will be a reduction to government revenue over time from this measure, it will also stimulate property transactions and the additional tax revenues thereby involved, including deed and stamp taxes.


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