Requirements for applying for the tax deductions or refunds related to the repurchase of self-use house and land
The National Taxation Bureau of Taipei, Ministry of Finance (hereinafter referred to as the Bureau), has specified that individuals applying for tax deductions or refunds related to the repurchase of self-use houses and land must adhere to certain conditions. Specifically, the individuals themselves, their spouse, or minor child(ren) must complete household registration at the address and demonstrate residence there. Furthermore, the houses should not be used for leasing, business operations, or professional practices.
The Bureau has clarified that, according to Article 14-8 of the Income Tax Act and Article 20 of the Directions for Filing the Income Tax on Consolidated Income from House and Land Transactions, tax deductions or refunds related to the repurchase of self-use houses and land are limited to specific circumstances. These include individuals who sell their previously owned house or land (with registered household residency and demonstrated residence) and subsequently purchase a new house or land for self-use; and individuals who acquire a self-use house or land before selling any other self-use property. However, it is crucial to note that the said houses and lands should not be used for leasing, business operations, or professional practices. The preferential mechanism for offering tax deductions or refunds related to the repurchase of self-use houses and land aims to encourage citizens to acquire property for personal use, i.e., as their actual residence. The determination of whether a property qualifies as self-use is based on "the objective usage status of the property". Hence, in addition to the property being registered under the name of the individual, their spouse, or minor child(ren), it must be demonstrated as an "actual residence" and not utilized for leasing, business operations, or professional practices.
The Bureau provided an example: Party A purchased Property A on April 27, 2022, and Property B on May 7, 2022, both with registration of sale. Subsequently, Party A sold Property A on July 4, 2022, and applied for a tax deduction for the repurchased self-use property when filing their individual house and land transaction income tax in August 2022. Upon verification, the Bureau found that Party A did not move into Property A as claimed and subsequently rejected Party A’s application for the aforementioned tax deduction. Party A disagreed with this decision and applied for a review. Party A claimed to have briefly resided in Property A, emphasized the decision to change residences due to inconvenience, and highlighted the impossibility of providing evidence, as all pertinent documents are no available as the incident occurred a year ago. According to the Bureau's inspection, although Party A registered a household at Property A, the actual water usage was consistently at 0, and the electricity usage remained at the standard basic level for general electricity users during Party A’s possession of Property A. The Bureau then concluded that there was no objective fact of actual residential use during Party A’s possession of Property A, which did not comply with the requirements of the preferential mechanism. Consequently, the Bureau rejected Party A's request for review.
The Bureau would like to emphasize that Article 14-8 of the Income Tax Act and the Directions for Filing the Income Tax on Consolidated Income from House and Land Transactions already specifies requirements for filing tax deductions or refunds related to the repurchase of self-use houses and land. That is, individuals themselves, their spouse, or minor child(ren) must complete household registration at the address and demonstrate residence there; and the property should not be used for leasing, business operations, or professional practices. The Bureau would like to remind all citizens to pay attention to relevant regulations in order to maintain their rights and interests.
(Contact person：Section Chief Chien from the Department of Legal Affairs； Telephone： 2311-3711 Ext. 2031)
Reference URL：https://www.mof.gov.tw/Eng/singlehtml/f48d641f159a4866b1d31c0916fbcc71?cntId=7b579665b0c24ffb9df17916dea2ca50