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Taipei City first initiates low house tax for households with only one owner-occupied residence, and other municipalities follow

The Department of Finance of Taipei City Government indicates that the house is for living, not for speculation, and the owner-occupied residence is the necessity for people. In order to protect the right of habitation, owner-occupied residence provides more tax preference than other real estate in tax system.

 

The department illustrates that the current tax law stipulates that households within three owner-occupied residence apply to the same tax benefit. Considering households with only one owner-occupied residence deserve a lower tax burden, since July 1, 2017, by lowering the base of house tax, it made effective house tax rate reduced from 1.2% to 1% for households with only one owner-occupied residence. Tainan City Government also endorses the above low-tax policy. Accordingly, Tainan City’s real estate assessment committee meeting held on March 19, 2019 also passed a resolution that households with only one owner-occupied residence in Tainan City are entitled to reduce house tax base.

 

The department further explains that over 200,000 households in Taipei City benefited from this tax preference. Furthermore, the department proposes to reduce the effective house tax rate to 0.6%, so that households with only one owner-occupied residence in Taipei City would benefit more from the house tax advantage. This proposal is expected to be discussed in the Taipei City’s real estate assessment committee meeting held in January 2020, and it would implement in July 2020 if committee approves the house tax preference above. In the year of 2021, people could pay the less house tax. For example, households with only one owner-occupied residence who pay house tax of NT$6,000 per year will reduce to NT$3,600 per year. Although the 0.6% house tax rate might cause NT$274 million shortage in Taipei City’s house tax revenue, but the discount of gradual increase of new standard value of houses in 6 years implemented since July 2017 already declines from 30% to 20%. It expects to increase tax revenue by NT$292 million, and just make up the tax losses caused by the above-mentioned low-tax initiative. In general, it would not affect the overall tax revenue.