Here’s one I just heard about - a 5% tax on the price of an apartment rental. Is this for real? I’m in Hualien and this came up at the end of price negotiations. Is it just a ploy or is it real?
OOC
Nope, not for me. My landlord drafted his own and receipt. Very informal.
[quote]Here’s one I just heard about - a 5% tax on the price of an apartment rental. Is this for real? I’m in Hualian and this came up at the end of price negotiations. Is it just a ploy or is it real?
[/quote]
It might be the management fee. Other wise it’s bullshit.
Brian
Brain, not necessarily bullshit, it the landlord is a company above the required size, then rental income would be subject to 5% VAT. This is the case for a number of landlords, just that they do not care to identify it separately.
However, it might also be a con as suggested.
[quote]Brain, not necessarily bullshit, it the landlord is a company above the required size, then rental income would be subject to 5% VAT. This is the case for a number of landlords, just that they do not care to identify it separately.
[/quote]
The landlord might have to pay tax on their income, but it’s pretty scammy to pass that on to the tenant.
Brian[/code]
Tax (10%) applies in Taipei if the contract is made between the landlord and a company on behalf of an employee (e.g. expatriate).
The landlord then needs to pay 10% directly to the government but passes on the cost to the renter.
If it’s a “private” contract, i.e. just between the landlord and you, then no such tax applies.
Rascal, sorry but incorrect, ALL rental income is taxable, it is just that many landlord do not declare and therefore have no need to pass on this cost.
Brian, if VAT is applicable then do not blame the landlord, it is the law of the land as with VAT on anything. It is not uncommon for prices to be agreed and then 5% added after, particulalry if most renters are themselves companies as they can deduct the 5%, not the case for private renters though.
Many company landlords also pay the 5% VAT, but because the majority of renters are private include it into the price, where applicable it is always there, just that some hide it, some do not. The same can be said for much of what yoy purchase from any supermarket, the price shown includes where necessary the relevant VAT element.
[quote]Rascal, sorry but incorrect, ALL rental income is taxable, it is just that many landlord do not declare and therefore have no need to pass on this cost.
Brian, if VAT is applicable then do not blame the landlord,[/quote]
So are you talking abotu an income tax or a VAT?
You can’t go passing your income tax on to the renter. That’s just dumb. We don’t pay any VAT on the aprtment that we own and rent out. I’ve never been asked to pay a 5% on my rent.
Nah, if there is a 5%, then passing it on to the tenant after agreeing on a price is just wrong. I’d tell them to fuck off.
Brian
Brian, as the poster mentioned 5% and as that is the current VAT rate 5% then i assumed VAT rather than income. As for agreeing then adding that is standard byusiness practice as it is deductible within the VAT returns.
Thanks Traveller. I do believe you are right about the VAT. Since there’s no government body knocking on my door to collect the tax, they can stuff it. The original rental price and the ‘management’ fee more than exceed the value of the apartment.
Neat way to grab an extra 5% from the dumb foreigner.
OOC
That makes (more) sense, didn’t consider the possibility that no such declaration is made when signing a private contract.
I was sure that rental income itself is taxable but I have been told by different agents that the landlord must deduct 10% if it’s a company contract, while for a private contract this does not apply. Nobody mentioned though that this is actually a mandatory tax even in the latter case, therefore I wrongly assumed it was an additional tax that applied to company contracts. Thanks for pointing that out.
Perhaps the risk getting caught is higher in case of a company contract since it’s documented at the company and hence will be declared to the government, thus the landlord being afraid the authorities notice if they cross-check the declarations.
If a private tenant agrees not to declare his rent as tax deduction then they “mutually agree not to pay such tax”. 
[quote=“OutofChaos”]Here’s one I just heard about - a 5% tax on the price of an apartment rental. Is this for real? I’m in Hualian and this came up at the end of price negotiations. Is it just a ploy or is it real?
OOC[/quote]
The good news is that since your landlord is claiming the income, and thereby paying tax on it, you can claim all the rent you pay as a tax deduction. Most landlords (illegally) don’t claim their rental income to avoid taxes, and because they don’t claim it, they don’t want you claiming it as a deduction.
Come tax time, if you itemize your deductions, you can deduct all your rental payments from your gross income. Just be sure to save records of your rental payments.
A bit more info:
Traveller was indeed on target. It is the VAT. My ‘landlord’ is a large company that sells and manages apartment units. Mine would be their second rental. They didn’t want the hassle of paying the VAT and wanted me to pay it - on top of the rent we had already agreed to. Not acceptable to this newbie.
OOC
And yet another question…
If the VAT isn’t specified in the rental contract, is it the responsibility of the renter or the rentee to pay it?
Even if you don’t play a lawyer or rental agent on Taiwan TV, feel free to weigh in.
Thanks.
OOC
[quote=“hoedad”][quote=“OutofChaos”]Here’s one I just heard about - a 5% tax on the price of an apartment rental. Is this for real? I’m in Hualian and this came up at the end of price negotiations. Is it just a ploy or is it real?
OOC[/quote]
The good news is that since your landlord is claiming the income, and thereby paying tax on it, you can claim all the rent you pay as a tax deduction. Most landlords (illegally) don’t claim their rental income to avoid taxes, and because they don’t claim it, they don’t want you claiming it as a deduction.
Come tax time, if you itemize your deductions, you can deduct all your rental payments from your gross income. Just be sure to save records of your rental payments.[/quote]
If your landlord doesn’t want you to claim your rent as a deduction then perhaps you can ask him to reduce your rent. 