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🇹🇼 Taiwan /Economy & Trade

Taiwan Property Market Cools: Short-Term Sales Tax Rate Drops Below 10%

From Liberty Times · () Chinese

Translated from Chinese, summarized and contextualized by DistantNews.

At a glance

News Sources not specified Outcome reported
  • Taiwan's real estate market is slowing, making short-term property transactions less profitable.
  • Data shows a significant drop in properties sold within two years, with the 45% tax rate falling below 10% for the first time in four and a half years.
  • Conversely, properties held for over five years, subject to a 20% tax rate, represent the largest share of transactions, while properties with no tax liability have reached a four-and-a-half-year high.

Taiwan's real estate market is experiencing a slowdown, with short-term property transactions becoming increasingly difficult and less profitable. This trend is clearly reflected in the latest real estate tax revenue data. According to Ministry of Finance statistics, the proportion of properties sold within two years of purchase, which are subject to a 45% tax rate, has fallen below 10% to just 9.14%. This marks the lowest point in four and a half years.

Holding property for less than two years and selling it, paying a tax rate of 45%, the proportion has fallen below 10%.

— Ministry of Finance statisticsStatistics on real estate tax revenue indicate a slowdown in short-term property transactions.

In contrast, properties held for five years or more, taxed at a 20% rate, now constitute the largest share of transactions at approximately 43.25%. Another significant category is properties with no tax liability, accounting for about 26.8%, the highest in four and a half years. Experts suggest this increase in tax-exempt sales could be due to a growing number of homeowners qualifying for the NT$4 million exemption for owner-occupied homes, provided they have resided in the property for at least six years. Additionally, some property sales may not have generated a profit after deducting costs, leading to no tax being due.

Properties held for more than 5 years, subject to a 20% tax rate, have the highest proportion, about 43.25%.

— Ministry of Finance statisticsData highlights the shift towards longer property ownership periods.

Real estate experts note that the two major property market booms in the past decade, one during the COVID-19 pandemic starting in 2020 and another leading up to September 2024, saw a higher proportion of owners selling after holding properties for over five years. The data indicates that selling properties within two years during these periods yielded limited capital gains, making the higher tax rate less attractive. The National Taxation Bureau is also scrutinizing the use of owner-occupied tax benefits to ensure compliance, particularly regarding continuous residency and ownership requirements.

The proportion of 'no tax payable' is the second highest, about 26.8%, the highest in four and a half years.

— Ministry of Finance statisticsThis indicates a significant number of property transactions with no tax liability.
DistantNews Editorial

Originally published by Liberty Times in Chinese. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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