Impact of Luxury Tax Policy on the Real Estate Market in Taiwan How Does the Implemented Luxury Tax Policy Affect the Real Estate Market Inflation in Taiwan? = Impact of Luxury Tax Policy on the Real Estate Market in Taiwan How Does the Implemented Luxury Tax Policy Affect the Real Estate Market Inflation in Taiwan?

다국어 초록 (Multilingual Abstract)

Following the millennium bubbles, numerous regional and global economic downturns, specific country tax policy changes, and bank mortgage policy changes, people lost their confidence in liquid assets, and instead tended to put money into the housing market. In the old days, due to loose, relaxed, short-term real estate tax policy, many speculative investors used borrowed mortgage money from banks to purchase and sell real property within a short time and made huge profits without paying a penny from their own pockets. The housing market inflated rapidly which caused serious societal problems―when residential properties are not for living but are used as investment tools, young generations cannot find housing at a reasonable price. The rich get richer, and the poor get poorer, the wealth inequality widens. After examining other countries`s applicable tax policies, Taiwan government implemented “The Specifically Selected Goods and Services Tax Act” (so-called “luxury tax”) on June 1st, 2011, which imposed a 10- to 15-percent luxury tax on sellers who held buildings and land for a period of less than 2 years. The legislative purpose stabilization of housing prices and lowering the volume of speculative short term real estate transactions. According to the statistics we collected from the implementation of the luxury tax to date, it is proven that the luxury tax does have some effects in the real estate market, but not a big impact yet. Therefore, further amendments are needed. This article will give a big picture of the real estate market change in Taiwan. Starting from the background of the real estate market, culture, luxury tax Act contents, government reports, real market surveys, and comparisons with other countries to summarize the impact of the luxury tax policy on the real estate market in Taiwan and further proposals.