The real estate market's healthy development is a matter of concern to citizens' right to adequate housing. Speculation and irrational pricing may result in resource misallocation and further widen the wealth gap, which will impact the financial system's stability as well as social and economic development.
Government agencies have adopted several measures to promote the real estate market's healthy development and discourage speculation and irrational pricing, including stepping up the management of sales of pre-sold homes, eliminating tax evasion in transactions done under a company name or where single units are subdivided into separate properties, and expanding social housing and rent subsidies. These measures will help curb speculation in the housing market, prevent tax evasion, prevent the housing market from being flooded by capital, and create quality homes to achieve housing justice.
The National Development Council summarized real estate issues and the response measures of related departments, and proposed the "Healthy Real Estate Market Plan" during the Executive Yuan's 3729th meeting on December 3, 2020. The implementation directions are as follows:
I. Short-term or Immediate implementation
- Discourage speculation: Discourage speculation in the pre-sold housing market by accelerating the amendment of actual-price registration laws, stepping up audits on sales of pre-sold homes, and investigating income from real estate transactions. Furthermore, real estate market diagnostic indicators will be established to monitor market development trends, and further used as the basis for evaluating policy implementation.
- Prevent tax evasion: Besides stepping up investigations into real estate transactions by profit-seeking enterprises, the Income Basic Tax Act and House Tax Act will be amended to eliminate tax evasion in transactions done under a company name or where single units are subdivided into separate properties.
- Prevent the housing market from being flooded by capital: Selective credit control measures and enhanced financial supervision will be implemented at the appropriate time, and banks will be urged to step up risk management of their real estate business, in order to prevent capital from flooding the real estate market.
- Create quality homes to achieve housing justice: The central government will construct 66,000 social housing units and expand rent subsidies to 120,000 households. Furthermore, greater incentives will be provided to landlords through tax incentives, in order to accelerate the implementation of social housing subletting management.
II. Mid-term and long-term: Continue to improve the real estate management system
The actual use of houses will continue to be inspected in the mid-term and long-term, and house tax rates, house purchases by private legal persons, and sales of pre-sold homes will continue to be reviewed, so that timely adjustments can be made.