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Talk of the Day -- Speculators to feel sting of new land valuations
Central News Agency
2013-12-13 10:02 PM
With home prices soaring, local governments have repeatedly increased the values at which they have assessed land parcels under their jurisdiction in recent years to rein in property speculation. This annual land value appraisal, called the "current assessed land value," is extremely important because capital gains taxes on property transactions in Taiwan -- called the land value increment tax -- are based on these appraised values rather than actual buying and selling prices. That means that if the current assessed land value rises, the holding costs and potential tax liabilities of property speculators will also go up. On Thursday, major city and county governments unveiled their updated appraisals in their jurisdictions, which will take effect at the beginning of next year. The Taipei City government, for instance, announced an average increase of 13.23 percent in its assessed land values throughout the city, the steepest adjustment in 22 years. Even with the double-digit increase, however, the appraised value was still lower than actual market values.

But it did take a big step toward meeting the Ministry of the Interior's (MOI's) requirement that current assessed land values reach 90 percent of market values by 2015, city officials said. After the adjustment, they said, current assessed land values in Taipei will reach about 89 percent of market prices. The following are excerpts from local media coverage of the newly announced current assessed land value adjustments and their possible impact on the local property market: Commercial Times: New Taipei took the lead among six special municipalities in announcing an update of its current assessed land values in its various districts on Tuesday. The city's current assessed land value will increase by an average of 17.45 percent, the biggest rise since 1991.

The sharp adjustment reflects the government's efforts to bring the assessed values closer to the soaring prices of property in the city, local officials said. Taichung was even more aggressive, increasing the assessed value of land under its administration by an average of 24.43 percent, the biggest rise among six special municipalities. The current assessed land value in Kaohsiung was raised an average of 10.42 percent, the city's sharpest spike in a decade. The governments of Taiwan's two other special municipalities, Tainan and Taoyuan (which formally becomes a special municipality on Dec. 25), said they will unveil their updated appraisals in the near future. Tainan said the average adjustment range will be higher than this year's 4.17 percent, while a Taoyuan official foresaw an average increase of 20 percent in his municipality. (Dec. 13, 2013) Economic Daily News: Property market analysts said the upcoming 13.23 percent hike in Taipei's current assessed land value could prompt a number of property speculators to put their real estate holdings up for sale before the end of 2013 to keep a lid on their land value increment tax liability. According to the newly unveiled adjustment scale, assessed values for property in the eastern part of Taipei appears to be rising far faster than for property in the western part of the city, analysts said. Meanwhile, they said, prices for presale properties are expected rise further after the adjustment. Huang Shu-wei, a Yungching Realty Group researcher, said the new system in Taiwan that requires actual property transaction prices to be registered has made it easier for local governments to bring current assessed land values in their districts closer to market prices. He said the land value adjustments made for 2014 could affect the property market's prospects, with fewer new construction projects launched. Expectations of sharp rises in the assessed land values may have already started to be felt, Huang said. The number of residential construction projects launched in November, for example, declined by more than 40 percent from October's level, he said. (Dec. 13, 2013) (By Sofia Wu)

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