With respect to a presale house sold after a settlement, the house and land holding period shall be excluded from the period of possessing the presale house
National Taxation Bureau of Taipei, Ministry of Finance expressed that those individuals who sell a house and land acquired after January 1, 2016 (including those acquired in the presale stage or upon completion of construction) shall file the individual house and land transactions income tax return. Nevertheless, some citizens who purchased a property in the presale stage and then sold the property after the settlement mistakenly thought that the property holding period should be counted from the presale house purchase contract signing date and were requested to pay the tax due as they had adopted a relatively lower tax rate.
The Bureau explained that a presale house purchased by an individual and sold thereby upon the settlement after January 1, 2016 is within the taxation scope of the house and land transactions income tax. The holding period of the house and land shall be counted from the real property ownership acquisition date (i.e., the house and land ownership transfer registration date recorded by the land administration authority) instead of the presale house purchase contract signing date. That is, the holding period of the presale house shall be excluded from the calculation; otherwise, it would be considered as encouraging people to sell a presale house immediately after the settlement and threaten the legislative purpose of curbing short-term speculation.
The Bureau further explained its position with an example: Party A purchased a presale house and its building location from a construction company with NTD120 million on October 5, 2016. After the presale house was built, Party A registered his acquisition of the house and land ownership on October 7, 2019. Later, on January 10, 2022, Party A sold the house and land for NTD130 million and completed the transfer registration. Party A calculated his house/land holding period from the presale house purchase contract signing date (October 5, 2016) to the transfer registration date of the sold house and land (January 10, 2022). Based on this duration (i.e., 5 years and 3 months), Party A then used the tax rate of 20% to calculate the total tax amount (NTD1.94 million) and filed the house and land transactions income tax accordingly. The tax collection authority, on the other hand, calculated the house/land holding period from the house and land ownership transfer registration date upon the settlement and obtained the right holding period, which was 2 years and 3 months (from October 7, 2019 to January 10, 2022). Based on the newly calculated duration, the tax collection authority used the tax rate of 35% to calculate the tax payable, which was NTD3.395 million; and requested Party A to pay the additional NTD1.455 million after deducting NTD1.94 million (the already paid amount) from the tax payable.
The Bureau reminds the public that individuals who sell a house and land within the taxation scope of house and land transactions income tax shall calculate the income or loss according to relevant regulations. Whether any tax payable is derived from the transaction or not, it is a must to file a tax return according to relevant laws and regulations to avoid punishment or penalty. Citizens who have any question or do not know details about relevant taxation law may contact local taxation bureaus for more information.
(Contact person: Examiner Liao of the Second Examination Division; Telephone: 2311-3711#1593)
Reference URL：https://www.mof.gov.tw/Eng/singlehtml/f48d641f159a4866b1d31c0916fbcc71?cntId=3cca674fcc7a4785b868e73d3341506a