A bill aiming to discourage speculation on Taiwan’s housing market has passed its final reading in the country’s legislature. The news on Friday means the new amendment to the Income Tax Act will come into effect July 1.
The Cabinet-approved amendments seek to discourage speculation in Taiwan’s property market by significantly raising the income tax rate for short-term buying and selling. For example, under the new rules, anyone who sells a house or land within two years of buying it will have to pay a 45% tax on their profit. That means the higher rate of tax is extended by a whole year, from one to two years. The rate drops to 35% after two years.
The new rates apply to both private individuals and companies. Previous regulations allowed companies to pay a lower rate of 20% as corporate income tax.
Taiwan’s capital city, Taipei, has one of the world’s least affordable housing markets. Government statistics show that an average property in the city is worth 16 times the local average income. That’s higher than most areas of London.