Taipei, MOF work to curb real estate prices
By Chi-hao James Lo ,The China Post
April 23, 2014, 12:08 am TWN
TAIPEI, Taiwan -- Taipei City Deputy Mayor Chang Chin-oh (張金鶚) met with Finance Minister Chang Sheng-ford (張盛和) yesterday to discuss municipal and national plans to deal with high real estate prices observed in the market.
During the meeting, Chang Sheng-ford proposed the following four solutions: expanding the scope of luxury tax implementation, increasing the real estate holding tax, imposing heavier taxation on non-owner-occupied housing and accelerating the activation progress of public land.
In response, Chang Chin-oh provided his observation and analysis, stating that the current residential housing tax covers all housing, irrespective of its occupants, and adopts a rating system from 1.2 percent to 2 percent, which limits the margin of adjustment. Instead, said the deputy mayor, there should be a differentiation between owner-occupied and non-owner-occupied housing with a higher margin of taxation on the latter, reaching as high as high as 3.6 percent. The deputy mayor also stated that a system of progressive taxation will also aid in reducing market prices.
Following Chang Chin-oh's evaluation, both authorities went on to come to consensuses on additional topics: synchronization of the taxation of residential land and housing under one regulation, and encouragement of the leasing of unfurnished housing units and the previously proposed “good landlord tax reduction program.” Both authorities also stressed that should the consensuses be positively received by both parties, a “House Hoarding Policy” (囤屋條款) could be under way to raise taxes for people who purchase multiple properties for the purpose of real estate speculation.
The Legislative Yuan Finance Committee (立法院財政委員會) is also set to convene a review on the residential housing tax bill today, looking to decided on a rate of increase for both owner-occupied housing and non-owner-occupied housing.
Brokers Respond to Meeting
The Chinese Association of Real Estate Brokers (不動產仲介全聯會) responded to the meeting the deputy mayor and finance minister yesterday, stating that the consensuses proposed by the leaders will not solve the high prices of real estate, nor will they aid young people in purchasing their own housing.
The solutions to the problems, stated an association representative, is a complete reform of real estate holding and transaction taxation, as well as constructing government social housing projects.
Association Chairman Lee Tung-rong (李同榮) cited the recent Sunflower Movement as an incentive of the government to reduce real estate prices, saying that the reduction is a government tactic aiming to win back the support of younger demographics. Should the plan fail, said Lee, the government will have to face substantial consequences.
Lee did show his support for the proposal of tax differentiation between owner-occupied housing and non-owner-occupied housing, stating that the longer the ownership of a piece of land or housing unit, the more reason for tax reduction as it will be evident that real estate speculation is not in play. Conversely, non-owner-occupied housing and business properties should receive higher taxes as the holding period of the properties are relatively short.