Taiwan says may tighten tax rule on property trading

TAIPEI (REUTERS) - Taiwan does not rule out the possibility of tightening a tax rule on trading properties and luxury goods, as it aims to narrow the gap between the rich and the poor.

Speculation has helped drive up property prices on the island, especially in the capital Taipei and some other northern cities, and worsened affordability at a time when growth is slowing.

Taiwan's Finance Minister Chang Sheng-ford told reporters over the weekend that studies show the tax has received positive feedback as it has helped curb property turnover and narrowed the gap between rich and poor.

The government introduced the so-called luxury tax almost two years ago. Properties that are sold in less than two years after being bought are taxed.

A 15 percent tax applies to properties sold within a year of purchase and 10 ppercent to those sold within two years. A 10 percent tax applies on sales of luxury goods worth at least NT$3 million (S$126,551).

One possibility is to collect the tax from buyers, which is what Hong Kong and Singapore have done, Mr Chang said.

Another option is to extend the tax-free period to three or four years from the current two years, the minister added.