The Ministry of Finance (MOF) yesterday said it had found 1,502 suspected cases of dummy buyers and abuses of preferential house loans in contravention of the self-occupancy rule.
The announcement follows the ministry’s move to crack down on abuses of favorable lending terms that include interest subsidies, a five-year grace period and mortgages of up to 40 years to help people purchase their first home for self-occupancy.
“With help from state-run banks and government data, we spotted 170 dummy buyers and another 1,332 mortgagers who leased out their houses,” it said in a statement.
Photo: CNA
The ministry has drawn criticism for rekindling housing fever by introducing the favorable lending terms in August last year.
Critics say the program and stock market rally have canceled the effect of a series of credit controls and policy measures that had earlier slowed housing transactions and price hikes.
The ministry said the results came from its first wave of inspections of housing deals from Aug. 1 last year to March 31 this year.
Housing transactions carried out from April 1 would be the focus of the second-wave probe, the ministry said, adding that it is confident that loan abuses would drop from June 27 when mortgagers are required to sign an affidavit stating that the house they are buying is for self-occupancy.
Violators would have their preferential lending terms revoked and they must return the interest differential, the ministry said.
In addition, favorable lending terms are limited to once per person, meaning that those who sell a home purchased under the program would not qualify in the future.
Property investors and wealthy people have allegedly used dummy buyers, including their children, to take advantage of the program and advance asset allocation purposes.
Tightened mortgage reviews appear to be effective, with loan applications last month declining 10.74 percent to NT$56.77 billion (US$1.74 billion) and 12.44 percent to 7,244 units, the ministry said.
The program is aimed at helping households without their own homes and unqualified buyers should not abuse the government’s goodwill, it said.
H&B Realty Co (住商不動產), the nation’s largest broker by number of franchises, said that the incidence of abuse was quite low, accounting for only 2.3 percent of 65,000 approved applications.
The small number suggests that real demand underpinned the housing boom for the past 11 months and should continue to lend support to the market, H&B head researcher Jessica Hsu (徐佳馨) said.
The double-digit percentage drop last month showed that the market took the government’s warnings seriously, Great Home Realty Co (大家房屋) said.
A longer observation of the market is needed to determine if the boom would be sustainable for the remainder of the year, it said.
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