2 contracts when renting out a house?

Ok I accompanied a friend to court for notary public, it’s for his house’s rent contract. However the rent is pretty low and I asked him about it…he said they do 2 contracts, one for tax and security purpose, for this contract they write a much lower value of rent on it so landlord can pay much less tax on it, and having it notary publics if he shall have any problem with tenant he can use that and the same for tenant. The other contract is the correct rent they agreed on, they don’t notary public it so no need to pay tax…my question is is this practice often in Taiwan? 2 contracts to avoid tax…what if the tenant just use the lower rent notary public one and refuse to pay the higher price they agreed on? I am going to rent out my 1st floor front so I was wondering about this.

I’ve never seen this practice and wouldn’t be comfortable with it, personally.

ya kinda odd…probably just stick with 1 contract…

they say that contracts with or w/o notary public contract both have legal power? but w/o notary public it will take awhile to kick them out , like a year or osmething…and with notary public you can enforce it right away?

Heck, most busineses have two sets of books…this sounds like “xiao case” to me. Although I can see why one might be uncomfortable with applying it to one’s own situation.

It’s unusual, but understandable. In this cas you should stick with the one that has a Notary Public. As the second one with lower rent will never stand up in court in this case.

It’s quite common for the landlord to try to dodge the tax, so basically

  1. If the landlord wants to get away with the tax, landlord will never ever want it witness by the Nortary Public, because once it is witnessed by the court or Nortary Public, he/she HAS to pay the rental income tax.

  2. Nortary Public is more in favour of the landlords, because w/o the NP, landlord can only seek legal assistance when the rent is 4 months in arrear, (that is when 2 months of bonds depleted and further 2 months of unpaid rent), that is when the legal action can be taken. This is a long battle for the landlord and the tenant could simply get up and move away, and who is left to pay for the legal bills and the damages??

So with two contracts the landlord in this case is rather smart, he/she is taking advantage of both ways, try to get away with paying taxes but also have protection by NP, hence two contracts!! But in court the one with NP is the proper contract the court will only regard, as it’s been witnessed by court. Hope the above helps.

I see…so I can’t use the 2 contracts methods then…actually I have a house that I am going to rent out…don’t really want to pay the 20% tax…maybe i won’t do notary public…

Don’t use the two contracts, really pointless and get you into hellota mess if something goes wrong. Just do a private agreement, you will be fine. 90% of the landlords never go to NP.