I do wonder if this will do anything to help with property costs. Wouldn’t it just make people hold on to their property even longer, causing an even greater “shortage” (by which I mean of homes actually on the market, as there are already way more homes than families to fill them)? Most people I know “investing” in real estate buy a new overpriced home every 2-3 years. But they never sell the old ones or rent them out. They just collect them.
I don’t think this tax addresses the actual issue, which is property hoarding, not speculation.
What happens after five years?
What do they plan to do with all these empty houses they own?
Nothing. That’s thing.
My wife’s family has many vacant properties. I ask what they do with them and they shrug their shoulders.
They collect them like Pokémon. They boast about them with friends and family. They don’t rent them out or maintain them. After 3 years they look like they are 20 years old.
They need a yearly property tax. Something like a percentage of market value plus a transfer tax on sales. It won’t stop the hoarding but it may address the value issue. Or not. I don’t really know how properties are valued.
There are a lot of these all over Northern Taiwan, Taipei, New Taipei City, Linkou, Danseui,
All that can be done is the government take these empty properties from the hoarders and then rent them out. There’s no capitalistic way to stop behaviors like this.
really? that’s a solution? c’mon.
Fact is none of the measures government takes will stem property value. More taxes just means they will hoard them further. Higher down payment means average person will be priced out of the property market. You need to understand property hoarders are so rich they can buy a 20 million dollar property every few years in cash. They do this because that 20 million dollar house will be worth 40 million in 10 years.
Only way to stop this is somehow crash the property market.
Only authoritarian measures will do this. The government should give an ultimatum. Rent them out or the government seizes them with minimal compensation.
Please send in your resume to ministry of economics.
Or the government builds properties themselves and sell it well below market value.
Flood the market with cheap properties.
Like a 30 ping flat for 1 million, only for first time homeowners, no money down, 30 year mortgage.
This will crash property value.
They are doing this.
A lot of the new buildings that went up this past year or two in Sanxia have been affordable housing projects.
Problem is, the construction is horrible. Sewage is leaking through the walls!
exactly. And Taiwan_Luthiers complains about TRA.
You want the gov’t building apartments. Zoiks.
It’s just a little more tax on the gains, easily compensated by a higher amount under the table.
Apparently the law is targeting house flipping / scalping (note it now includes presale homes). There is trend in Taiwan where when a new apartment block goes on sale, speculators will line up overnight, buy up all the prime apartments, then immidiately sell them for a quick 10-20% profit.
This instant price increase means that they often end up being bought by other spectators and professional landlords, pricing out new home buyers. It’s also said that alot of these overnight lines are fake (to fein interest), and the apartments are presold to friends/family of the building company for a quick flip.
Bridging down the price of new houses should causes prices to even out eventually.
Curious how this is going to work. People will have to pay tax on houses they sold 5 years ago?
And now you have to explain to millions of constituents why you wiped out the value of their wealth overnight. Figuratively speaking.
Have fun next election!
There’s no way to address this without hurting someone. Either someone has their wealth wiped out or property remains expensive.
I know what @Taiwan_Luthiers means. Extreme measures and wiping out gloated property wealth is the only way that housing hoarding will stop. The people I know who hoard houses still live in the first one they bought. Then they let their son live in one of them for a few months before convincing him that he wants to “come home”. All the other properties sit empty. It’s a colossal waste of resources, drives up the cost of home ownership for even generally high income individuals, and means there’s some serious Monopoly money in the market.
I have joked that if I won the mega millions (lottery in the US, sometimes gets up to 500 mil USD), I would build properly luxury apartments around Taipei that must be lived in for one year before someone could buy their own, currently rented unit. Then I would require all residents of the unit to register their hukou to that address. Anyone not registered to live in the unit caught living there would face a massive fine. I would make it explicitly clear in the contract and hire people to keep an eye on who’s coming in and out of the building all the time. Cuz that’s the other thing: mom owns and registers hukou at one address, dad another, mom and dad buy third property in child 1’s name and hukou, next in child 2’s, etc. Then you’re not just hoarding property for the sake of hoarding it, you’re not getting taxed on your additional properties as additional property AND, since income taxes are based on household registration, you’re avoiding the higher tax bracket that you should be paying since everyone is actually living together.