Because we moved from a work economy to an asset economy. You buy more assets using the passive income from your existing assets or you borrow against your assets to buy more. You don’t need the best paying job, if you have assets you leverage them and use your salary to pay off the bank. Over and over again, this is why asset prices rise much faster than wages.
People are very protective of their assets, so introducing laws that would level the playing field becomes more and more difficult.
2 Likes
We did this. We borrowed against our first apartment to buy a vacation apartment in Hualien. The Hualien apartment was cheap and it’s almost paid off now.
3 Likes
Or rather, wage should keep pace with commodity prices. In the US commodity has gone up way too fast because corporations think they can just raise prices, with little to no competition.
And the problem with an asset economy is that only the rich can play the game. Can someone making 35,000 a month with little to no bonus (TSMC pays this wage from their job postings, but they give several months, sometimes close to 10 in bonuses, so the compensation package is not reflective of their low wage) ever get into this game? Not really. So we see a destruction of a middle class. You can’t have a healthy market economy without a good middle class.
Have you never played Monopoly? That game teaches you all you need to know.
2 Likes
I stopped going to Starbucks every day in my 30s just so I could retire at 56. lol
1 Like
Increase capped at 2%. They’ll go up by 35% in 15 years. Will be challenging if you live on savings or fixed income during retirement.
2% cap sounds good. When you factor in the property prices things get less rosy. For those who bought more recently around median price of US$2 million in a mid-range neighborhood, the monthly property tax is around US$2000. Very tough for retirement.
No wonder rent is so high. You gotta factor in the maintenance and property tax.
Taiwan’s property tax is very low. Whole flat that I currently live in (and I only rent 2 rooms) has a yearly property tax of like 3000nt. It’s probably what kept rent low too.
I pay more than that a month.
I don’t know then. I look at the receipt (which I need to register hhr)and it states 3000 something a year. Unless there’s some other tax that’s not on the receipt.
Put otherwise, the benefits of the hard work of hundreds of thousands of people in Taiwan (many from abroad) are not distributed to the workers but instead to the managerial and investor class. This is happening around advanced economies. In my opinion it’s a terrible trend.
Guy
1 Like
It depends on a number of factors, e.g., age of building, floor, area, size, etc.
Our new place is only a little bigger than the old one and in the same area, but the property tax (fang wu shui) is 10x higher.
I thought it was based on the market value of the property. Or how do they assess property tax here?
You are right, though it doesn’t increase if property values stay flat or descrease. Ours is roughly half of what it would be without the cap.
I have 1100 pings of land and two buildings on it.
One building is my house the other is my wife’s homestay on the ground floor and above that is my office.
Did you know that before a certain brother duo came up with the lie that they invented the game Monopoly there was a woman 31 years prior who patented the game “The Landlord’s Game” and the entire point of the game was to learn that very few people benefit when we allow the asset class to exist? There were actually two ways to play, one as monopoly and the other as anti monopoly. The idea was that people would conclude that anti monopoly was more fun to play and therefore being anti monopoly was better for us all in the real world. Sadly, in 1935, a lying theft of a man made the whole thing about being a jerk based on chance allowing you to be a jerk and made a bunch of money off it (and they still crack down on anyone that tries to make their own “opoly” games almost a century later.
1 Like
That’s what I love about government pensions—mine start at 55. And indexed for inflation.
1 Like
When mine begins in 2030, it will be as well. I deferred to get more. $$
I’ve got one at 55, one at 60 (that I can defer to 70 if I want), one at 65 and one at 67–all indexed.
How much is the market value? I bet the whole flat I stay in is worth around 10 million.
My dad’s house in Taichung, sold for about 12 million, had a 3000nt a year tax as well.
The Financial Supervisory Commission, on Wednesday morning, convened a meeting with eight state-invested banks and five privately-owned banks. During the meeting, the agency instructed banks to prioritize loans for first-time homebuyers. They’re also asked to build a dedicated webpage, so that homebuyers can check if they can secure a mortgage.
1 Like