Taipei, Feb. 25, 2011 (CENS)--Sales of non-own use residences with less than two years of ownership will be subject to special sales tax ranging from 10% to 15%, as part of the “luxury-tax” scheme which was sanctioned by President Ma Ying-jeou yesterday (Feb. 24).
Ma also instructed that in the utilization of public land, the government should seek cooperation with the private sector for joint development, instead of selling such land outright, and should integrate individual plots of public land for large-scale development, so as to augment their value. The government can set up a fund for such development projects, according to Ma. The total space of public land now tops 1.785 million hectares, according to the statistics released by the National Property Administration, under the Minister of Finance.
The “luxury-tax” scheme, with the formal title of the “statute for special commodity and service tax,” won the support of Ma, during a briefing made by Lee Suh-der, finance minister. In addition to the aforementioned realty transaction, it also covers privately owned autos worth over NT$3 million, yacht, and airplane, and fur, coral, and other products of protective species worth over NT$500,000, as well as club-membership certificate, such as that for golf club, worth over NT$500,000.
The tax scheme is expected to generate over NT$10 billion of extra tax revenue a year for government coffers, including NT$8 billion from realty tax. The Ministry of Finance (MOF) will hold public hearings for the tax scheme in March to solicit input from various parties before its enactment within this year, at the earliest.
The tax scheme has been formulated in response to the bad image of luxury spending among the rich ones in the society, as well as the continuing deterioration in income allocation.
According to the scheme, sales of non-own use residences with less than one-year ownership will be subject to a special tax of 15% and the tax will be set at 10% for such residences with less than two-year ownership.