Revised property tax to start on July 1
Date:2021-04-10
Lawmakers across party lines yesterday agreed to July 1 as the provisional date on which a draft amendment to the Income Tax Act (所得稅法) is to come into effect, with the aim of curbing real-estate speculation. Under the changes, the tax on individuals and businesses would be set at 45 percent on gains from the sale of property within two years of purchase and 35 percent on gains from properties sold within two to five years of purchase. Currently, the 45 percent rate applies only to gains on property sales within the first year of purchase, while the 35 percent rate applies only on sales made within one to two years of purchase. Those rates only apply to individuals. Businesses pay an across-the-board rate of 20 percent on such gains under corporate income tax rules. By imposing the same tax rate on individuals and businesses, the bill aims to prevent individuals from setting up companies to trade property and pay only 20 percent on their gains. For people and companies buying property from outside Taiwan, the 45 percent tax would apply to gains on property sales within two years of purchase, up from one year, after which the rate would remain at a flat 35 percent, according to the bill. The tax on individuals for gains on properties sold five to 10 years after purchase would be 20 percent, and 15 percent thereafter. For companies, the rate would return to 20 percent after five years. The revisions also widen the scope of properties to which the tax applies. While the tax previously only applied to transactions of existing residential properties not considered to be for “self-use,” under the amended version it would apply to the sale of presale homes, above-ground use of land rights and special shareholdings. The measures would apply retroactively to transactions dating back to 2016. Reference: Tapei Times CNA
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