MOF mulls real estate transaction tax revisions

2014-09-12

A revision of tax laws governing real estate transactions in Taiwan is being mulled by the Ministry of Finance as part of efforts aimed at creating a more equitable system in line with global standards.

The changes also represent the government’s response to policy suggestions proposed by Academia Sinica in July, as well as a commitment to spurring healthy development of the local housing market.

“The ministry has organized two seminars with representatives from academia, civic groups and the private sector over the past two months,” an MOF official said. “We are continuing to seek input from all parties of interest in this regard.”

Under the revisions, capital gains from real estate property transactions will be taxed at market value, as opposed to the existing dual-track system. The latter is often criticized as a tax avoidance loophole.

“The MOF is yet to decide whether to propose different tax rates for such gains or include earnings as part of consolidated income for taxation purposes,” the official said.

At present, real estate transactions are levied a land value increment tax based on changes in public assessed worth, while gains from selling buildings are taxed on market values and counted as part of consolidated income.

The bill also offers exemptions for owner-occupied housing and measures to encourage long-term ownership, but high-price transactions will be excluded from such provisions.

“We are working to iron out details of the revisions and will fast-track the legislation for Cabinet approval by the end of the year or early 2015,” the official said.

Source: Taiwan Today (http://taiwantoday.tw/ct.asp?xItem=221482&CtNode=413)