Typical Taxes and Fees
When buying or selling a house in Taiwan, you will incur several taxes and fees. These may include:
- Property transaction tax: This tax is levied on the purchase price of the property and ranges from 1.5% to 3% depending on the location and type of property.
- Land value increment tax: This tax is levied on the increase in land value when the property is sold. The tax rate ranges from 10% to 40% depending on the length of time the property has been owned.
- Real estate agent fees: If you use a real estate agent to sell or buy a property, you will need to pay their fees, which usually amount to around 1% to 3% of the property’s value.
In Taiwan, property tax is levied by the local government and is based on the assessed value of the property. The tax rate ranges from 1.2% to 3.6% of the assessed value.
Capital Gains Tax (CGT)
If you sell a property in Taiwan, you may be subject to capital gains tax. The tax rate is currently 15% and is applied to the difference between the sale price and the purchase price.
In Taiwan, inheritance tax is levied on the value of the inherited property. The tax rate depends on the value of the property and the relationship between the deceased and the heir.
If you receive a gift of property in Taiwan, you may be subject to gift tax. The tax rate depends on the value of the property and the relationship between the giver and the receiver.
Tax on Property Income
If you rent out your property in Taiwan, you will be subject to tax on the rental income. The tax rate ranges from 5% to 45%, depending on the amount of rental income.
If you buy a house in Taiwan and use it as your primary residence, you may be eligible for certain tax deductions. These include deductions for mortgage interest and property tax. Additionally, if you are a foreign national buying a house in Taiwan, you may be eligible for tax incentives such as a reduction in the land value increment tax. However, it’s important to consult with a tax professional to determine your specific tax situation.