萬國法律事務所

On December 19 2023, Taiwan's Legislative Yuan has passed several tax-related bills, particularly focusing on the amended “House Tax Act,” which is known as “House Hoarding Tax 2.0.” Under the amendments, the so-called house hoarding tax payable by those owning a fourth or more houses not for self-dwelling purposes will be raised from the existing 1.5-3.6 percent to 2-4.8 percent per unit. The new tax rate is set to be implemented from July 1 2024, with tax collection starting in May 2025.
 
Key points of the amendment include the application of higher tax rates on non-self- occupied houses by counting the total nationwide instead of the current method of counting them by administrative region. Local governments are obligated to collect house taxes using the new tax rates based on a progressive scheme, with the amount rising as the number of houses owned rises.
 
Under the changes, the tax for individuals owning one unit below a certain value will decrease to 1% from the previous 1.2%. Meanwhile, the 1.2% rate will persist for second and third houses occupied by house-owners, their spouse, or minor children. Additionally, the tax on rental properties will decrease to a range of 1.5-2.4% from the prior range of 1.5-3.6%, aiming to encourage multiple property owners to consider renting out their houses.
 
The estimated impact of the new tax rate is on approximately 4.45 million households in Taiwan, generating an additional tax revenue of about NT$ 22.7 billion to NT$32.7 billion.
 
Concerns have been voiced, especially from the construction industry, regarding contradictions between policies affecting post-construction sales and the tax amendment. Experts foresee potential effects on landlords potentially transferring increased costs to tenants, thereby affecting rental prices.
 
There's a projection of five significant changes in the housing market due to the new tax rates, including adjustments in property ownership patterns, encouragement for property renting, a shift towards the purchase of pre-owned houses, a preference for pre-sale completions, and potential adjustments in large-sized property pricing strategies.