Taiwan mulls new tax on investors' home resales within two years of purchase
Taiwan is mulling changes in luxury-tax rules to narrow the gap between property prices and incomes as the pace of economic expansion slows.
"Current rules have flaws. For example, we are unable to tax those deep-pocketed investors, who can wait for more than two years to sell properties," Finance Minister Chang Sheng-ford said. Sellers are already taxed, and changes may include a levy on buyers of properties.
Property prices in Taipei are rising and the gap between home prices and incomes is widening. A luxury tax was introduced in June 2011 and may now be extended to investment properties sold within two years of purchase, Chang said.
A 15 per cent tax is levied on commercial and residential investment properties sold within a year of purchase; the levy is 10 per cent for those sold within two years. A 10 per cent tax is levied on sales of luxury goods such as yachts and aeroplanes worth at least NT$3 million (HK$777,000) and furs and furniture valued at NT$500,000 or more.
In May Taiwan lowered its official forecast for gross domestic product growth this year to 2.4 per cent from 3.6 per cent amid weakening global recovery.
The changes in taxation would focus on real estate rather than other luxury items, Chang said.
The finance ministry will discuss the changes with the industry and experts next month before drawing up a blueprint.
Taipei's residential property price index in April was 6.7 per cent higher than in August 2012.