As part of government efforts to curb speculation in the housing and property market, luxury homeowners and large land parcel holders will be required to pay higher taxes. After a meeting with representatives from 25 local tax offices Monday to discuss revisions to the House Tax Act and the Land Value Tax Act, the Ministry of Finance (MOF) is planning to change the House Tax Act from its present flat rate of 1.2 percent to a four-tiered scheme ranging from 1.1 to 1.8 percent. Owners of houses valuated by the government at over NT$1 million (US$31,250) and people who own land parcels of more than 60.5 pings (200 square meters), would have to pay higher taxes with effect from 2011 at the earliest. The MOF estimated that the rate hikes would bring in more than NT$10 billion per year in government revenue. The following are excerpts from local media coverage of the issue: The Liberty Times: The MOF is planning to submit the law amendment proposal to the Executive Yuan by the end of this month, then the revision will be referred to the Legislative Yuan for screening during the current session. Under the proposed tax schedule, 3.44 percent of Taiwan households, or some 300,000 families, would pay more in house taxes. This includes middle-income families. At the upper level, for example, the owners of the luxury tower Treasure Palace in Taipei City's prime Da-an district would have to pay an additional NT$70,000 in house taxes per year. Some academics have criticized the government as taking 'false action' in a bid to ease public discontent over high housing prices. The critics have expressed doubts that such a move could really restrain luxury property owners and have argued that the tax would more heavily burden middle-income families and spur greater public resentment. National Chengchi University Professor Chang Chin-oh contended all official measures would be 'pseudo' action if government taxation rates on property are not structured on the basis of real market value, which is usually much higher than local government valuation. China Times: Deputy Minister of Finance Chang Sheng-Ford said that after the hikes are implemented, the tax rate on owner occupied residences valued at more than NT$1 million will be increased to between 1.2 percent and 1.8 percent, from the current flat rate of 1.2 percent. In terms of land value taxes, the rate will be increased from 0.2 percentage points to 1 percentage points to a range between 17-65 percent, with close to 200,000 households expected to be affected, he said. Chang said based on a law revision, the Finance Ministry will be able to adjust land valuation at any time depending on the market situation, if the tax takes effect from 2012. (March 16, 2010) United Daily News: According to Sinyi Realty, the planned measures would only affect owners of units in 'big, tall and new' buildings -- in other words, owners of upscale housing units of more than 150 pings valued at more than NT$8 million. Less than 1 percent of Taiwan's families would be affected under the new tiered taxation plan, and it is not expected to impact the housing market, the real estate company said. This wave of symbolic tax hikes is not likely to curb the overall housing market, but there are signs that potential average house buyers are beginning to adopt a 'wait-and-see' attitude, the real-estate broker said Monday. (March 16, 2010) 