Taiwan tries to slam door on tax cheatsOverseas Property | 17 Dec 2020
Taiwan's cabinet has approved measures to sharpen the transparency of property transactions and combat tax avoidance such as in equity transfers.
Aimed at reining in real estate speculation, the Executive Yuan's proposals include the mandating of public disclosures of prices and the addresses of all properties sold on the island and amendments to the Income Tax Act to close a loophole that allows individual real estate investors to avoid taxes by buying a property under a company name.
Currently, officials of the Ministry of the Interior noted, real estate agents hired to handle presold homes are only required to report their sales in bulk within 30 days of the finalizing of a contract.
Under proposed changes, realtors would have to report transactions individually within 30 days of each sale - giving potential buyers a more timely understanding of property prices.
Ministry officials said the public disclosure move will make prices and full addresses of all real estate transactions searchable to the public at large - an improvement on the current system, which only lists the approximate location of a property.
Real estate transactions through a company or equity transfers must also be included in basic income details to combat tax avoidance.
According to the ministry, the plan would also increase penalties for people who fail to report or falsely report property transactions at least three times, raising the maximum fine from NT$150,000 (HK$41,300) to NT$750,000 and allowing for someone to be fined multiple times.
The cabinet's plan would also empower the Ministry of the Interior to investigate suspicious transactions by requesting documents directly from financial institutions and government agencies, thereby reducing the burden on local regulators.
Premier Su Tseng-chang said the four-point plan would increase market transparency while also protecting a right to privacy and also help keep housing prices at a "reasonable" level.