Gifting Farmland to Spouse Won't Erase Misuse Violations, Experts Warn

A property owner's misunderstanding of land tax laws has highlighted a critical point for agricultural land owners in Taiwan. The individual, referred to as "Old Chen," believed that gifting his farmland to his wife after temporarily using it as a parking lot would nullify any previous violations and reset the record.

However, tax experts clarified that this is not the case. According to the Land Tax Act, if agricultural land is found to be misused, and the owner fails to restore it to agricultural use within the specified period, or if the misuse recurs after improvement, land value increment tax will still be levied upon subsequent transfer.

The case illustrates that even when land is returned to its original state and then gifted to a spouse, the history of misuse is not erased. If the spouse is later found to have misused the land again, even if they rectify the situation within the deadline, the violation record will be combined with the previous owner's history. This means the land will not qualify for the exemption from land value increment tax upon future sale.

Local tax bureaus emphasize that agricultural land approved for land value increment tax exemption must continuously be used for agricultural purposes. Gifting the land between spouses does not restart the violation clock. Owners are urged to be aware of these regulations to avoid impacting their future tax benefits.