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Taiwan Takes First Step To Property Tax Changes

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

15 December 2011


Taiwan’s Legislative Yuan has passed amendments to the law governing the registration of real estate sale prices, which might represent the first step in changing the basis of calculation of property taxes.

At present, property taxes in the country are based on an assessed value, as determined by local authorities. However, in a speech earlier this year, Taiwan’s President Ma Ying-jeou had confirmed that the government would look, over time, to change their tax basis to a calculation by reference to relevant transaction or market prices.

It was said that the new valuations would probably be introduced in stages, and that, while the government has established no timetable for the new measure, implementation could take up to five years. It has also been recognised that, before the measure could be made effective, local authorities will need to produce a registry of property transactions and their prices.

The production of that registry has now been made more likely by the approval of amendments to property legislation that would require property purchasers, brokers and land administration agents to register the actual value of property transactions within 30 days of a sale being completed, or pay a fine of between TWD30,000 (USD993) and TWD150,000.

It is hoped that the new regulation, while providing additional transparency to Taiwan’s property market, will go some way to reducing speculation and the dissemination of false information about house prices in the country. Transparency will also be helped by another new measure which will require central and local governments to publish property market statistics on a regular basis.

Therefore, while parts of the tax code would also need to be changed before property taxes can be based on market prices, the President’s target has come closer. An effort to control property prices in Taiwan’s cities, that have reached levels beyond the means of average wage-earners, was also behind the imposition of the tax on speculative property purchases, from June this year.

A comprehensive report in our Intelligence Report series dealing with the issues raised by international property investment, and the possible taxation implications raised by such purchases, with an account of the likely (and some less obvious) potential countries for your consideration, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report15.asp
TAGS: tax | investment | business | real-estate investment | property tax | speculation | law | real-estate | Taiwan | legislation | regulation

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