Taiwan tax bureau: Property tax applies even to unpermitted structures like garages

Taiwan's tax authorities are reminding residents that property tax obligations extend to structures built without permits, including self-constructed garages. The Hsinchu County Tax Bureau addressed recent inquiries from citizens who questioned why they owed property tax on garages built without obtaining a construction license.

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Regardless of whether a house has legally obtained a use permit, as long as it has housing value and actual use, whether it is an illegal building, an illegal addition, or other buildings that have not been legally applied for, they must still be established for property tax registration according to law, and taxed according to the applicable tax rate based on the actual use.

The bureau explained that under current regulations, property tax applies to various structures attached to land and any buildings that increase a property's value. To ensure tax equity, regardless of whether a building has a legal occupancy permit, any structure with demonstrable value and use, including illegal constructions, unauthorized additions, or buildings constructed without proper application, must be registered for property tax purposes. Tax will be levied based on the actual use and applicable rates.

Crucially, the tax bureau emphasized that paying property tax does not grant legal status to illegal structures. The act of paying taxes fulfills a taxpayer's obligation but does not signify that the construction has been legalized or that the process has been completed. These are distinct matters.

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The taxpayer's legal payment of property tax is only to fulfill the tax obligation, and it does not mean that the illegal building has obtained legal status, nor can it be regarded as having completed the legalization process because it has paid property tax. The two are not the same.

The bureau further highlighted that the addition, expansion, or modification of illegal structures is a key focus during annual property tax investigations. If property owners fail to report the establishment of a property tax registry or accurately declare the actual use of their property, they may be required to pay back taxes for previous years and could face legal penalties. Property owners are therefore urged to proactively report any new constructions or modifications, such as expanding garages, adding floors, or extending balconies, to the relevant tax authorities within 30 days of completion to avoid potential fines and protect their rights.

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Property owners should, within 30 days of the completion of construction, proactively report to the competent tax collection agency in the location of the house for property tax registration, to avoid being required to pay back taxes or being fined for failing to report according to regulations, which may affect their own rights and interests.