Taiwan Today

Taxes will be raised on luxury residential properties in Taipei City from July 1, 2011, the municipal government announced Feb. 2. Mayor Hau Lung-bin said in recent years luxury buildings have sprung up like mushrooms after rain, boosting property prices and bringing complaints from citizens. Taxes on luxury houses, however, are low in comparison with those on most residences, and sometimes even lower than management fees for the building. In the interest of public fairness, a hike in luxury house property taxes was called for. Hau said luxury residences will be defined not by their floor space or current price, but by location and construction (of either steel reinforced concrete or reinforced concrete). Commercial buildings and villas, already covered in another taxation category, will not be included. Other factors will include whether or not the building stands alone, luxuriousness of the exterior, landscaping, desirability of the location, the number of households per floor, whether every household has a parking space, building security and maintenance services. Among the city’s total of 11,177 households in 269 upscale buildings, Da-an District leads with 52 buildings, followed by Xinyi, Zhongshan and Shilin districts; in number of households, Zhongshan tops the list with 2,073, ahead of Xinyi, Wenshan and Da-an. Datong and Wanhua districts each have just two luxury residential buildings. Hau said the tax will be imposed in terms of a luxury residence standard construction unit price, setting a sliding location rate from 100 percent to 280 percent, or one to 2.8 times the current property tax. The new tax is expected to be collected from May 2012, with the tax for each household going up one to 1.8 times, adding over NT$300 million (US$9.37 million) to the city’s coffers. City Finance Commissioner Chiou Dah-jan gave the example of a luxury apartment of 245 ping (784 square meters) in Da-an District. Its current market price is NT$390 million. The owner presently pays annual property taxes of NT$150,000. With the luxury house tax, that would triple, to NT$450,000. The Taipei City Revenue Service said after cataloguing all luxury residences, it expects to determine the luxury house standard construction unit price index in February. The second Tax Administration Enhancement Seminar will be convened in late March, followed by the Property Tax Committee preparatory meeting in mid-July, after which the proposal will go to the Property Tax Committee for review in mid-August. It will then go to the city government for final approval and promulgation. (THN)