The Taipei City Government will increase the property tax on luxury apartments starting in July next year, Taipei Mayor Hau Lung-bin (郝龍斌) said yesterday, with other counties and cities to follow suit at a later date.
More than 10,000 households in 269 luxury apartment complexes and houses in 12 districts will be affected by the new measure, the Taipei Revenue Service Office said.
Under the new regulations, each luxury household in Taipei will pay about three times more tax.
PHOTO: LIN CHENG-KUNG, TAIPEI TIMES
Announcing the new policy, Hau said the swelling price of luxury residences and increases in housing prices had become the top public complaint. Raising the property tax on luxury apartments is therefore "reasonable," he said.
"It is a reasonable taxation policy and I think it reflects the principle of social justice," Hau said at Taipei City Hall.
Hau said the standards used to define "luxury apartments" included construction materials, location, lighting, landscaping and parking space. The annual tax increase for each household would be between NT$30,000 and NT$60,000. Some households will pay up to three times their current property tax.
Chiu Da-chan (邱大展), commissioner of the Taipei City Department of Finance, said the city government was not aiming to increase city revenues with the tax, as the new measure would only bring in about NT$300 million (US$9 million) annually.
The extent of the increase would be determined on a case-by-case basis, he said.
The current property tax of The Palace luxury apartment complex on Renai Road, for example, is NT$625 per ping. The owner of a 245 ping unit pays a property tax of NT$150,000. Under the new policy, the tax will increase to NT$450,000, Chiu said.
Of the 269 luxury apartments in Taipei, 52 are located in the Daan District (大安) and 43 in Xinyi District (信義).
The Ministry of Finance said yesterday the new tax was being introduced to achieve fair taxation and alleviate the fiscal burdens of local governments.
The ministry called a closed-door meeting of representatives from nationwide revenue service offices yesterday to discuss the standards for adjusting house taxes.
"We reached a consensus that housing taxation must be equitable," Deputy Minister of Finance Chang Sheng-ford (張盛和) told reporters yesterday.
House taxes are calculated based on the estimated current housing value, which involves the standard construction unit price, the depreciation rate and the location.
Chang said the standard construction unit price had been stable for the past 25 years, failing to reflect actual construction costs, which went up amid rising raw material prices.
"For example, the actual construction costs for a 10-story building in Taipei City can reach between NT$21,000 and NT$26,000 per square meter, but the current standard construction unit price is only NT$4,580, which was set in 1984," Chang said.
"The standard construction unit price is only one-quarter to one-sixth of the actual construction costs, so it is not reasonable and should be raised," Chang said, adding that the discrepancy led to unfair taxation and tax deficits.
Under the House Tax Act (房屋稅條例), local real estate assessment committees meet once every three years to assess the standard construction unit rate.
Chang, however, said that the government is planning to amend the law so the meetings take place each year.
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