Taiwan Announces Luxury Tax to Dampen Property Bubble

Following the lead of a number of its Asian neighbours, the Taiwanese parliament has approved a new tax on real estate investments and luxury goods designed to reign in the buoyant market...

Following the lead of a number of its Asian neighbours, the Taiwanese parliament has approved a new tax on real estate investments and luxury goods designed to reign in the buoyant market.

The "luxury tax", which is still awaiting final approval from the government, has been tabled in an attempt to curb surging prices in the country which threaten to form an asset bubble.

Under the terms of the proposed plan, property investors in the country who choose to sell their assets within two years of purchase will be subject to a ten per cent tax, this rises to 15 per cent if the property is sold within one year. The tax will not apply to properties the owners live in.

Soaring prices in Taiwan have been blamed, in part, to an increase in speculation from investors and the special tax is aimed primarily at controlling and preventing this practice from increasing.

Many average income earners in the country have found themselves priced out of the market, with the ratio of home prices to disposable income in the capital, Taipei, at its highest level in 20 years.

- Monday 18 April 2011

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