Maximum housing tax to be raised to 3.6%
The China Post news staff
April 24, 2014, 12:00 am TWN
TAIPEI, Taiwan -- A legislative committee yesterday approved an amendment to increase maximum housing taxes from 2 percent to 3.6 percent.
According to the Legislature's Finance Committee, more than 660,000 people in Taiwan own over three houses, resulting in a property hoarding problem.
In order to solve the problem, the amendment was proposed and it will take effect by next May if it passes all three readings at the Legislative Yuan, lawmakers said.
According to the amendment, the housing tax will remain at 1.2 percent for landlords who rent out their properties at a reduced price to low- and middle-income families on a platform provided by the government as well as homeowners who reside in their housing units.
If the amendment is passed, the minimum housing tax will be raised from 1.2 percent to 1.5 percent, while the maximum housing tax will be raised from 2 percent to 3.6 percent on non-owner-occupied properties.
According to the Finance Committee, about 15 percent of those in Taiwan will be affected by the amendment if it takes effect.
Finance Minister Chang Sheng-ford (張盛和) said that tax rates for owner-occupied properties will not apply to married couples who own more than one housing unit.
Definition of Owner-occupied Property
According to the amendment, housing units that people purchase for their parents or their non-minor children will be considered as owner-occupied properties, Chang said, adding that housing units purchased by parents for children under the age of 20 will not be eligible owner-occupied property tax rates.
The Ministry of Finance will come up with an official definition of owner-occupied property, Chang said.
"I support having separate taxes for owner-occupied and non-owner-occupied properties," Chang said. "But local governments maintain the right to regulate the actual percentage based on the number of houses a person owns."
Chang stressed that raising housing taxes on non-owner-occupied properties will not affect those who live in their own homes.
According to the amendment, housing taxes for businesses will remain between 3 percent and 5 percent, but housing taxes for clinics, hospitals and freelancers will be raised from the current 1.5-2.5 percent to 3-5 percent.
Based on current regulations, housing taxes are between 1.2 percent and 2 percent regardless of whether the housing unit in question is an owner-occupied or non-owner-occupied property.
When asked if homeowners with a larger number of children who are no longer minors can purchase more "owner-occupied properties" to avoid higher tax rates, Chang said that his ministry will study the scenario.
When asked how much the government expects to receive in extra revenue, the minister said that the amendment is not aimed at increasing revenue, adding that it is instead designed to help bring about more reasonable housing prices.