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Minister presses for real estate transaction tax

TAIPEI, Taiwan -- Interior Minister Chen Wei-zen (陳威仁) said on Saturday that the government should levy a real estate transaction tax to prevent speculative investment in the housing market, which makes housing unaffordable for young people.

Chen made the comment at the National Conference on Economic and Trade Affairs held yesterday, which was also attended by a number of heavyweights from the government, academia and business.

According to Dr. Finance Inc. CEO Lin Tzu-yi (林祖儀), while the nation's wage level has dropped to that of 16 years ago, housing prices have grown 15 percent in the past year. In many cases, the amounts of money earned by the rich through speculative property investment are higher than those earned by young workers in their whole lives, Lin said.

Housing prices are an equilibrium point between supply and demand, Chen said, adding that an unjust taxation system in the past has pushed prices higher. He believes that the government should exact a real estate transaction tax to make it right. Part of the tax collection should be allocated into a special fund used to make sure everyone can own their own homes.

In order to make housing more affordable for young people, Taipei Chamber of Commerce director-general Wang Ying-chieh (王應傑) suggested that the government grant higher mortgages to young people purchasing their first homes, increasing the loan-to-value ratio from 50 percent to 90 percent, which can then be paid off over 30 years.

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