Undeclared Demolished Home Disqualifies Owner-Occupied Property from Tax Break

A Tainan resident, referred to as Xiao Chen, recently discovered their single, owner-occupied home was ineligible for the preferential 1% housing tax rate. Despite owning only one property and residing there for years, the tax bill reflected a higher rate. Upon seeking clarification from tax officials, it was revealed that an old, demolished house in the countryside had not been properly deregistered, impacting the homeowner's eligibility.

According to the Tainan City Government's Bureau of Finance and Taxation, to qualify for the single-residence tax rate, individuals must meet several criteria. These include owning only one property nationwide (along with their spouse and minor children), the property's value not exceeding a certain amount, and the property not being rented out or used for business. Crucially, the property must be the actual residence of the owner, their spouse, or direct descendants, and have completed household registration.

Tax experts advise that failure to deregister demolished properties can lead to them being counted towards a household's total property count, thereby disqualifying the owner from the preferential tax rate. To avoid such issues, residents are urged to promptly apply for deregistration of the tax registry after demolishing a house. The tax bureau confirmed that deregistration, once verified, stops housing tax collection from the month of demolition. If a property is demolished and reported between July 1st of the previous year and February 28th of the current year, housing tax for the period before demolition is still due, but the property will not count towards the national total for that year.