Supporting Documents of the Expenses Paid for Addition, Improvements, or Maintenance Claimed in the House and Land Transactions Income Tax Return Filed Should Be Provided
The National Taxation Bureau of Kaohsiung, Ministry of Finance stated that the calculation of the transaction of house or land after January 1, 2016 is based on Article 14-4 of the Income Tax Act, if the house or land is acquired by sale or purchase, the balance of the transaction proceeds at the time of the transaction less the original acquisition cost and the expenses paid for the acquisition, improvement and transfer shall be the income amount. In addition, in accordance with Point 13 of the Directions for Income Tax on House and Land Transactions, the expenses paid for addition, improvements, or maintenance that increase the value or performance, which will not be depleted within two years, of a house after the purchase of the house may be included in the cost to be deducted, provided that supporting documents such as invoices, receipts or proof of payment are presented for verification.
For example, in 2022, Mr. A sold his house and filed the house and land transactions income tax return. He claimed renovation expenses of NT$4.62 million (NT$4.5 million for renovation + NT$120,000 for household appliances), but did not attach any supporting documents of renovation expenses. Mr. A explained that after purchasing the property in 2018, he had commissioned a contractor to renovate and repair the old house, and the total cost of the construction project was NT$4.5 million. However, due to the long lapse of time, no supporting documents such as relevant vouchers, quotations or payment for the project were kept, so the Bureau could not recognize the renovation expenses. In addition, the amount of NT$120,000 for the purchase of household appliances was claimed, although there were invoices presented, but it was not an expense that could increase the value or performance of the house, so the amount of NT$4.62 million was excluded in accordance with the preceding regulations.
The Bureau reminded taxpayers to obtain and retain invoices or receipts, quotations and payment-related supporting documents to protect their rights and interests in the event of repairs or renovation to their houses.
Contact: Ms. Li, Revenue officer of the Second Examination Division
TEL: 07-7256600 ext.7257
Reference URL：https://www.mof.gov.tw/Eng/singlehtml/f48d641f159a4866b1d31c0916fbcc71?cntId=c34ee15ce6df4e039c8ebf2fa4d434b7