National Taxation Bureau of Kaohsiung, Ministry of Finance explained that, the acquisition date of house and land for individuals selling acquired houses and land shall be the completion date of the ownership transfer registration. Even if the pre-sale house is reserved from the construction company before December 31, 2015, if the date of ownership registration of the completed house is after January 1, 2016, the sale of the house and land shall be subject to the new house and land transactions income tax. The holding period should be counted from the completion date of ownership transfer registration, which is excluding the pre-sale stage, and the holding period of pre-sale and completed houses shall not consolidate.
For example, on January 1, 2015, Ms. Li signed a housing reservation contract (i.e., a pre-sale house purchase contract) with the construction company, and the construction company completed construction and the ownership transfer registration on January 1, 2017. After acquiring the completed house, Ms. Li sold it and registered the transfer at the Land Office on August 1, 2021. Although Ms. Li had reserved the pre-sale house since 2015, the acquisition date of the completed house was January 1, 2017, which was after January 1, 2016, so it shall be subject to the house and land transactions income tax. In addition, the holding period of the completed house does not include the pre-sale stage. When Ms. Li sold the house on August 1, 2021, her holding period was from January 1, 2017 to August 1, 2021 (4 years and 7 months; more than 2 years and less than 5 years), and the 35% tax rate shall apply. It cannot be combined with the period of the pre-sale stage (From January 1, 2015 to August 1, 2021; 6 years and 7 months; more than 5 years and less than 10 years), and thus the 20% tax rate shall not apply. It is important to pay attention to the calculation of the holding period when filing tax return in such cases.
National Taxation Bureau of Kaohsiung reminds taxpayers that since July 1, 2021, the pre-sale house and the located lot acquired by individuals after January 1, 2016 are subject to the house and land transactions income tax 2.0. For the sale and purchase of pre-sale house, regardless of whether there is any tax payable or not, the tax return shall be filed within 30 days from the day following the contract date of the pre-sale house purchase contract. If the pre-sale house has become a completed house at the time of sale, the tax return arising from the sale of the completed house shall be filed within 30 days from the day following the ownership transfer registration date to avoid penalties.
Contact: Ms. Lee, the officer of Second Examination Division
TEL: 07-7256600ext7257