Public supports taxes based on real profit, not luxury tax: survey
By John Liu, The China PostTAIPEI, Taiwan -- Close to 33 percent of the population feels that the luxury tax should be annulled in two years, and that real estate transactions should be taxed based on real earnings, according to a survey conducted by Chinatrust Real Estate (中信房屋).
September 25, 2013, 12:08 am TWN
Twenty-seven percent of the population believes that transactions taxable by means of the luxury tax should include transactions made within three or four years. Meanwhile, 10.8 percent feels that the luxury tax should be annulled; 9.6 percent feels that the luxury tax should remain in effect.
Under the luxury tax which was launched two years ago, if a property acquired not for personal use is sold within two years of its purchase, a tax rate of 10-15 percent is levied on the sales price. The aim is to curb short-term selling, which is blamed for pushing housing prices even higher.
Luxury Tax's Impact
While the luxury tax failed to bring down housing prices in Northern Taiwan, it caused investors' capital to move southward and consequently resulted in housing prices going up in Central and Southern Taiwan, according to Chinatrust Real Estate vice chairman Richard Liu (劉天仁), who added that fewer transactions in the real estate market also led to slower businesses in related industries, such as household hardware, indoor decoration, and building and construction.
There are still some people who are afraid of a real earnings-based taxing system, which levy taxes based on the difference between selling prices and the costs involved in acquiring the property. Nevertheless, many feel that the real earnings-based tax system should be normalized and systemized as soon as possible, so that taxes may be collected more fairly. An online open-access database has been established by the government to record all transaction prices in the real estate market.
Optimism About the Fourth Quarter
Chinatrust collaborates with market research company InsightXplorer to conduct a housing survey every quarter. For the third quarter, the survey was conducted between Aug. 22 and Aug. 29. A total of 1,703 survey samples were retrieved. Residents of Taiwan who are at least 20 years old, those with a regular income, retired people, and housewives who have the power to make household financial decisions were among those being surveyed.
The results showed that 56 percent of the population is willing to invest in Taiwan's real estate market, while record numbers of retired people or those aged 50 or older are willing to make real estate investments. Consequently, the surveyor felt confident that the housing market will warm up in the fourth quarter.
According to the survey, 60 percent of the population believes that government-sponsored public housing and “affordable housing” is the best solution to the problem faced by many young people of being unable to afford a new home. Twenty-six percent of the population believes that the government's continuing efforts to suppress housing transactions or extending luxury tax's scope as ideal solutions.