Agents, developers warn real estate prices to jump in 2014
The China Post news staff
December 14, 2013, 12:02 am TWN
TAIPEI, Taiwan -- Land developers and real estate agents yesterday warned that real estate prices throughout the country may go up further next year after a steep increase in land value on the first day of 2014, when sellers are expected to unload their tax burdens on buyers by raising prices.
Anticipating a more than 10-percent increase across the board, land developers in the country are said to be anxious to deliver the keys to home buyers by the end of the year in an attempt to prevent an entailed increase in land value increment tax (土地增值稅) from eating into their profits.
The sense of urgency was triggered yesterday by news that the government is going to sharply raise the so-called publicly announced current value of land (土地公告現值) on January 1, 2014 to narrow the gap between government-estimated value of land and its market price.
Taipei can expect a 13.23-percent increase, the steepest in 22 years; New Taipei, a 17.45-percent hike; and Taoyuan City and Taichung, a more than 20-percent increase, according to a Central News Agency report.
Information about increases to hit other parts of the country was not immediately available.
The so-called public announced current value of land, which is reviewed annually, is land value arrived at after the central and local government conduct district-by-district surveys of land price fluctuations within their jurisdiction and then forward their findings to land price review boards as the basis for adjustment recommendations.
The re-valuation this year has been greatly facilitated by an extensive use of real-value registered prices, instead of actual transaction prices, a CNA report noted.
The annually re-adjusted value, which typically goes into effect on the first day of a new year, constitutes the basis for determining the rate of land value increment tax levied on land owners.
Land developers who acquired their land when prices were lower a few years ago but have yet to deliver completed homes to buyers will likely be left holding the bag after they, as land owners, are hit with higher taxes next year.
A development project encompassing 200 to 300 units would now be a hot potato indeed because it could mean an additional NT$30 million or more in tax payments next year, a real estate agent said.
A developer, however, warned that home prices may go up sharply next year when supply is being hit with this one-two punch—the introduction of a luxury tax in 2011 and the increase in land value in 2014.
An aftershock of the news was that prices of stocks in construction firms fluctuated sharply on the local bourse before closing more or less unchanged