Realtors believe recent tax rate reduction will boost sales

Tsai Chi-yung, Sinyi Realty Estate director of research, said yesterday the money saved in the tax reduction will be channeled into investment in quality real estate.

Sinyi is one of Taiwan’s top real estate companies.

The government increased income tax reductions, raised the exemption of inheritance tax to NT$12 million and that of gift tax to NT$2.2 million.

Before, they were NT$7.79 million and NT$1.1 million, respectively.

The purpose of the government in raising the exemptions is to induce Taiwan investors overseas to plow their money back to the island, Tsai said.

Most of them are likely to choose real estate for investment, Tsai predicted. “Why,” he said, “investment in other assets is too risky, now.”

In particular, Tsai said, idle capital overseas would not go to Taiwan’s stock market.

“We have every reason to believe that the tax cuts would boost the public confidence in the realty industry,” Tsai pointed out.

His prediction may not be borne out, however.

The money saved is more likely to go to bank savings accounts, just as it did in Japan after nearly a trillion dollars were pumped into the pockets of its taxpayers by the government in the last decade.

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