Actual price taxation a must for new luxury homes: MOF
The China Post news staff
January 25, 2014, 12:03 am TWN
TAIPEI, Taiwan -- Yesteryear's luxury home sellers will have to cough up more money to pay taxes on their real estate transactions when they file their income tax returns in May 2014 if they cannot prove the exact costs of their acquisitions, Finance Minister Chang Sheng-ford (張盛和) said Thursday.
This is a first step toward "actual real estate transaction price taxation," Chang was quoted as saying.
If sellers fail to provide information about how much they paid for the houses when they first acquired them, 15 percent of the actual closing price will be considered taxable income, Chang explained.
Officials said the tax rate is 40 percent. According to a real estate agency, about 10 percent of the 39,000 homes sold in Taipei last year were properties that went for NT$80 million or more each. New Taipei City's 2013 figures, however, were not immediately available.
The tax burden on a person or business who sold an apartment in Taipei for NT$300 million last year, for example, will be NT$5.4 million, said the officials, who added most sellers last year were developers and builders.
While only NT$90 million out of the total is included in the formula, the NT$210 million land cost, which constitutes 70 percent of the actual transaction price, is not, they said.
Fifteen percent of this NT$90 million, or NT$13.5 million, is taxable, they explained, adding NT$13.5 million times 40 percent is NT$5.4 million.
Defined differently across the country, a luxury home in Taipei or New Taipei is one valued at NT$80 million or more, while in other parts of the country a luxury home is a NT$50-million or more apartment or house.
Tax levied on cheaper homes, whether they are in the two cities or elsewhere, will be calculated on the basis of their estimated current value, the official explained, adding this means less tax revenues for government coffers because in most cases it is grossly underestimated.