TAIPEI: Taiwan’s lawmakers approved a property gains tax of as much as 45 per cent to rein in speculative transactions in the real estate market.
Domestic individual sellers will have to pay from 15 per cent to 45 per cent. The tax will be calculated based on market prices instead of government-assessed value currently. Qualified home sellers with gains of less than NT$4 million (S$174,000) will be exempted from the duty. The rules will apply to property bought after Jan. 1, 2016.
Taiwan is introducing the tax after residential real estate prices tripled in the capital Taipei in the past 12 years, raising concerns that property is becoming unaffordable. An index of prices in Taipei City compiled by Sinyi Realty Inc. surged to 302.06 points in the first quarter from 99.63 in the same period in 2003 when the island was hit by an outbreak of severe acute respiratory syndrome.
“It would be more difficult to reap much profit from short-term plays given the increased transaction burdens,” Stanley Su, senior researcher at Sinyi, said Friday. “The regulations could help curb speculation and benefit the market with stable and healthy development in the long run.”
