In order to encourage the effective utilization of houses and rationalize the house tax burden, Taipei City Council passed the third reading process of the amendment to “Taipei Municipal Government Ordinance of House Tax Levy” on November 13, 2024. It will be implemented from July 1, 2024, and will effect the house tax payments be collected from May 1, 2025.
Department of Finance (DOF) of the Taipei City Government (TCG) stated that the President promulgated the revised House Tax Act on January 3, 2024, and that the Ministry of Finance successively promulgated “The standard to determine the benchmark of current value of single owner-occupied houses, and the standard of differential house tax rates and brackets” on April 1, 2024. Both significantly adjusted the tax rates of residential houses and authorized local governments to set differential tax rates. TCG has made amendment of Taipei Municipal Government Ordinance of House Tax Levy. The key points of the amendments are as follows:
I、Added household registration to requirements for owner-occupied houses:
For houses used for residential purposes by the owners to be levied in the preferential tax rate, taxpayers must meet the requirements as below:
1. The house cannot be used for rental or business.
2. The owner of the house, whose spouse, or whose lineal relative resides in the house.
3. The total number of owner occupied houses owned by a married couple and their minor children, shall not exceed three.
According to the House Tax Act, the revised Taipei Municipal Government Ordinance of House Tax Levy implemented from July 1, 2024, added requirement that the owner, whose spouse, and/or whose lineal relative should complete the household registration of the owner-occupied houses.
II、The tax rate of single owner-occupied houses is set at 1%:
Previous regulations had no statutorily preferential tax rate for single owner-occupied houses. In order to realize the adequate rights to housing and take care of the basic housing needs of citizens, TCG has lowered the real tax rate for single owner-occupied houses by reducing the tax base of such houses since 2016. The amendment to House Tax Act refer to the concept, stipulated that the tax rate of single owner-occupied houses at 1% and not allowed by reduction of tax base. In order to mitigate the abruptly increasing tax burden on citizens, TCG has announced after the extraordinary meeting of the Taipei City Real Estate Assessment Committee approved to restore the tax base gradually within four years, which had been recognized by the Ministry of Finance.
III、To promote the effective utilization of houses, rental houses with a declared rental income reaching the local prevailing rental standard can adopt lower house tax rates:
To encourage people to release vacant houses to rental market and meet citizens’ needs of housing, the tax rate for rental houses with a declared rental income reaching the local prevailing rental standard shall be 1.5% to 2.4%.
IV、Rationalize the house tax burden:
For non-owner-occupied houses used for residential purposes owned by taxpayers who hold multiple houses without effective utilization (including the rental income of such houses are not declared and vacant ones), except houses of special usage applicable for lower tax rates, the house tax rate shall be 3.2% to 4.8%, levied progressively based on the total number of houses held by the owner nationwide.
V、Simplify the collection process:
Referring to the current levy method of land value tax, the last day of February of each year is the base date for the duty of paying house tax for the whole taxable year. In the event to a change in the use of a house, the taxpayer shall report the change to the local competent tax authority at least 40 days in advance of the commencement of the collection period for each taxable year (i.e. March 22). In the event of a change to the use of a house resulting in a decrease in the amount of house tax payable, if the taxpayer fails to report the change in time, the new tax rate will become applicable from the taxable year following the taxpayer’s report; where the change results in an increase of the amount of tax payable, the new tax rate will become applicable from the taxable year following the change.
Finally, DOF appreciates the support of the Taipei City Council. Made Taipei the first city to pass the amendment of municipal ordinance of house tax levy among the six municipalities. DOF also expect that the passage of the amendment of Taipei Municipal Government Ordinance of House Tax Levy could achieve promoting the effective utilization of houses, rationalizing the house tax burden, and making the process of collection more simple and efficient.