Taxing Troubles: Taiwanese Homeowner's 4 Million NTD Tax-Free Allowance Lost

A Case Study in Taiwan's Property Tax Laws: Avoiding Common Pitfalls

Since the implementation of Taiwan's 房地合一稅 (House and Land Combined Tax) in 2016, the tax rates on real estate transactions are categorized into 45%, 35%, 20%, and 15% tiers. Homeowners meeting specific self-occupied requirements can benefit from a 4 million NTD 免稅額 (tax-free allowance) and a preferential tax rate of 10%, making this a crucial element in tax planning. However, experts caution that failure to fully meet the eligibility criteria means restarting the six-year waiting period, potentially leading to the loss of self-occupied tax benefits due to a minor oversight.

According to 鄭文在 (Zheng Wen-zai), director of 正業地政士 (Zhengye Land Registration Agent), a recent case involved a client, referred to as 阿明 (A-Ming), whose situation exemplifies this. A-Ming's property was neither rented out nor used for business purposes and was indeed used as his primary residence. However, he overlooked a crucial detail: the registered resident was his underage child, who was 13 years old at the time. After six years of residency, the child had turned 19 (and therefore was of the age of majority), thus no longer meeting the requirement of "minor child registration".