'Hoarding tax' could combat rising home prices
By Ted Chen , The China PostTAIPEI, Taiwan -- In an effort to curb rampant inflation of home prices, the Ministry of Finance yesterday announced that it is considering adding a “hoarding” category to upcoming amendments of the luxury tax in legislative session.
October 29, 2013, 12:22 am TWN
The hoarding tax is aimed at individuals owning more than one home, one of which they do not inhabit. The proposed tax would target individuals such as landlords renting out properties, according to Finance Minister Chang Sheng-ford.
As regards taxes on transactions of pre-sell housing units, Chang clarified that governing bodies have not set a threshold at NT$30 million, and that transactions of all amounts will be audited for revenue collection, in response to a lawmaker's queries. Chang rejected the lawmaker's claims that the ministry intends to only audit transactions of pre-sell housing units valued at more than NT$30 million, a tax threshold that would purportedly do little to curb rising home prices. Chang emphasized that individuals who frequently conduct real estate transactions will be subject to increased scrutiny.
According to Chang, the move will markedly improve enforcement of the existing house tax (房屋稅) category by local governments throughout Taiwan. At present, the house tax can mandate levies of up to 2 percent, with many local governments electing to set the figure at the minimum 1.2 percent, said Chang. Individuals owning more than one home should be subject to higher tax rates under the stipulations of the luxury tax, said Chang. An estimated 660,000 individuals were found to own more than three properties, said Chang.
Meanwhile, Chang allayed concerns over a proposed housing tax hike by stating that most individuals owning a single residential property will not be affected. He stated, however, that the decision to impose an additional hoarding tax remains under the aegis of local governments. According to Chang, the ministry's role in this endeavor is limited to providing incentives in the form of additional funding to compliant local governments who consent to the implementation of increased tax rates.