Luxury tax may be reviewed every 2 years: finance chief
By John Liu,The China PostTAIPEI, Taiwan -- As the luxury tax has had a positive impact on the real estate market it will not be annulled but may be reviewed every two years, Finance Minister Chang Sheng-ford (張盛和) said yesterday.
August 20, 2013, 12:02 am TWN
The Ministry of Finance held a conference yesterday to review the effectiveness of the luxury tax since its implementation two years ago. Realtors, legislators and scholars were among those participating in the meeting.
Under the luxury tax, 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.
According to a Chunghua Association of Public Finance report, there are about 660,000 people who own more than three properties in Taiwan. These are the very people who should be taxed, the report recommends.
Tax's Positive Impact
According to professor Hwang Yaw-huei (黃耀輝), who works with the association, the luxury tax has stabilized housing prices as well as suppressed short-term selling and speculative investments. Taxes are applied differently based on individuals' wealth, since those with greater financial means are now paying more taxes, Hwang said.
Given that housing prices are still rising to some extent, and that there is still plenty of capital flowing in the real estate market, the tax will not be revoked in the short-term, Minister Chang said, adding that future amendments to the luxury tax will better meet the public's expectations.
Chang said that the tax will not be applied differently based on regions, since speculative investments are occurring nationwide and also as doing so would be difficult practically.
He stressed that a sunset clause will not be set up for the luxury tax until a robust real estate market is established in which no one is hoarding properties and all young people can afford to buy a home.