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Taipei City Government Lowers Tax Rate for Single Owner-Occupied Residential Property Again in order to carry out Housing Justice

At the Housing Justice 2.0 press conference, Taipei City Government indicates that the house is used for living in, not for speculation. Housing Justice means citizens can live safely, comfortably and with dignity, and can avail themselves of basic living needs in Taipei City. By that, put Article 10 of the Constitution “people shall have freedom of residence” into practice. Accordingly, Taipei City Government originated the first low-tax initiative for households with only one owner-occupied residential property in order to carry out housing justice and guarantee people’s right to reside.


The Department of Finance of Taipei City Government states they have set short, medium and long-term tax reform targets to carry out housing justice progressively. Current tax law stipulates that households with three or less owner-occupied residential properties apply to the same tax rate of 1.2%; however, Taipei City Government considers that households with only one owner-occupied residential property deserve a lower tax burden. So since July 1, 2017, owners of such properties with household registration in Taipei City have been entitled to reduce the current property value for house tax calculation from 1.2% to 1% tax rate. Furthermore, it proposes to reduce the house effective tax rate to 0.6%, so that households with the only one owner-occupied residential property in Taipei City can benefit from the tax advantage. In addition, social housing managed and houses leased for public welfare are entitled to reduce the current property value for house tax calculation because they assist the government to satisfy the dwelling needs of citizens and the disadvantaged. Based on the policy of reducing tax burden for houses leased for public welfare, Taipei City Government is proposing to reduce the house effective tax rate by 50% in line with single owner-occupied residential property. Above-mentioned two proposals are expected to be discussed in the Taipei City’s real estate assessment committee meeting in January, 2020. If it is approved by the committee, it can be implemented in July of the same year at the earliest. Therefore, when people pay the house tax in May, 2021, the tax amount can be further reduced. It is estimated to benefit 230,000 householders.


In medium-term plans, Taipei City Government has applied differential tax rate under the tax rate ceiling on householders with four or more houses or non-residential houses according to the House Tax Act. This can facilitate house holding cost. Besides assuring the lowest tax rate of 0.6% for the single owner-occupied residential property, Taipei City Government also suggests Central Government amending the approaches to carry out housing justice. That is from 1.2% tax rate for householders with three or less houses to empowering the local government to apply progressive tax rates under the 3.6% ceiling on householders with two or more houses and corporations with residential houses.


Taipei City Government not only supplies social housing but also reforms the tax system to ameliorate the dwelling problem. The reassessment on land value has adjusted from every three years to every two years. Therefore, Taipei City Government suggests that Central Government should amend the House Tax Act to adjust the reassessment frequency of the standard values of houses to once every two years. In the long-term plans, property tax should be levied on real estate which includes houses and land. Taxation is made in proportion to the market value of each property. House and land values should not be divided. This will improve the administration efficiency, lower the cost of tax collection, and rationalize the tax system.


The department further explains that Taipei City Government is striving to establish better dwelling environment. In order to activate and utilize existing idle houses, reuse residential resources and care for more citizens, the tax reform will continue to be promoted in the future, and the housing justice will be carried out gradually.