Applicability of tax incentives for self-use residential houses in house and land transaction income tax filings for foreigners residing in Taiwan without registered household
For foreigners who have not registered a household in Taiwan and are therefore determined to be residing in the Republic of China as specified in Article 7, their “residence address” on the “Resident Certificate” may be considered their “household registration” when applying for tax incentives for self-use residential houses in house and land transaction income tax filings.
The National Taxation Bureau of Kaohsiung, Ministry of Finance, explained that, when foreigners residing within the territories of the Republic of China sell a house or property, they can enjoy tax incentives, which include an income exemption of NT$4 million and a preferential tax rate of 10% for amounts exceeding taxable income of NT$4 million, in house and land transaction income tax filings if they comply with the following three criteria:
1. The taxpayer, his/her spouse, or their minor children have registered their household at the self-use residential house, and have possessed and resided in the house for 6 consecutive years. Foreigners are determined as having completed the “household registration” with the “residence address” specified on the Resident Certificate.
2. The self-use residential house has not been used for lease, business operation, or professional practice in the last six years before its sale.
3. The taxpayer, his/her spouse, or their minor children have never applied for the same tax preference in the last six years before its sale.
The Bureau provides examples:
Example 1: Party A is a foreigner residing within the territories of the Republic of China who purchased House A in March 2017 for self-use. Since Party A is not a citizen of the Republic of China, Party A is ineligible to register household at that address. However, the address specified in Party A’s Resident Certificate matches the address of House A; Party A had possessed and resided in House A for six consecutive years; and the house had not been used for lease, business operation, or professional practice in the last six years before its sale. Party A sold House A in November 2023 and, due to Party A’s compliance with these self-use property requirements, an income exemption of NT$4 million was deducted from the total taxable income, with a preferential tax rate of 10% applied to amounts exceeding NT$4 million for calculating the tax due.
Example 2: Party B is a foreigner residing within the territories of the Republic of China. Party B purchased House B in Kaohsiung City in February 2017 and then moved to Taipei City in October 2017. In September 2023, Party B commissioned a real estate broker to sell House B in Kaohsiung. Although Party B had possessed House B for over six years, Party B did not comply with the self-use property requirements because Party B’s address specified on the Resident Certificate was Taipei City. Therefore, Party B did not receive tax incentives for self-use residential house and had to file the house and land transaction income tax with a tax rate of 20%, applicable for the possession of the house and land for five to ten years.
The Bureau would like to remind foreigners who sell real estate property to file the house and land transaction income tax within 30 days from the day of completing the transfer registration. Regarding the applicability of tax incentives for self-use residential house, taxpayers must reside within the territories of the Republic of China and ensure compliance with the aforementioned three major requirements. If you encounter any issues related to tax filings, you are welcome to call the toll-free number 0800-000-321 or go to the Bureau’s website（https://www.ntbk.gov.tw） to make an inquiry online through the national tax smart customer service “National Tax Assistant.”
Provided by: First Individual Income Tax Section
Contact person: Section Chief, Mr. Chang. Phone number: （07）7256600 ext. 7270
Contributor: Ms. Lee. Phone number:（07）7256600 ext. 7222
Reference URL：https://www.mof.gov.tw/Eng/singlehtml/f48d641f159a4866b1d31c0916fbcc71?cntId=f8012ecc5070491ca1de9a5e68ecddd8