Taiwanese tax bureaus to audit land value tax reimbursements for re-purchased homes

Taiwan's tax bureaus are initiating a comprehensive review of land value tax reimbursements granted for home re-purchases. The focus is on identifying and recovering refunded taxes from cases where the property was not used as a self-occupied residence within the stipulated five-year monitoring period.

Key violations under scrutiny include transferring ownership to others, moving household registration away from the property, renting it out (including public rental or social housing programs), or using it for business purposes. Such non-residential uses within the five-year window will result in the recovery of previously refunded land value taxes.

Local tax authorities, such as the Pingtung County Government's Department of Finance, are reminding landowners of the strict conditions attached to self-occupied housing tax rates. These include not renting out or using the property for business in the year prior to sale and within the last five years. The department conducts annual checks to ensure compliance, warning against any attempts to circumvent the rules.

Furthermore, tax experts are alerting authorities to a scheme where individuals transfer small portions of land to others to establish co-ownership. They then use tax-exempt or non-taxable land alongside taxable land for co-ownership division, aiming to avoid taxes on actual transfers and artificially inflate the previous transaction value of taxable land. Tax authorities will re-evaluate such cases based on the actual transfer intent rather than the co-ownership division, potentially imposing land value taxes if the division is deemed a disguised transfer.