萬國法律事務所

Taiwan’s Ministry of Finance (MOF) draft bill for the imposition of a special tax on specific goods and services (commonly known as the “luxury tax”) excludes foreclosures, presale housing, inherited land, and real estate trusts. Ever since MOF announced the luxury tax, which imposes an additional tax of 10% to 15% on the sale of all real estate held for less than 2 years, all presale housing projects have immediately slowed down. However, per MOF’s definition, the sale of “presale housing” is a type of sale of “right” and not a transfer of real property. As such, there would be no imposition of luxury tax and, instead, only income tax on the transaction of the asset based on the “market price” will be imposed. Real property excluded from the luxury tax or the house suppression tax includes the following: 1. Foreclosures: As foreclosures of real estate do not constitute short-term transactions of speculative nature, and are often made at a loss, no luxury tax will be imposed. 2. First sale of newly constructed real property: Although the property could be sold within two years of possession, this constitutes an ordinary business activity and as such no luxury tax will be imposed. 3. Land that is not subject to or that is exempt from land increment tax, including inherited land, agricultural land, land gifted between spouses, public places, land expropriated by the Government, zoning expropriation, urban land readjustment, and real estate trusts. 4. Presale housing.