Understanding Taiwan’s ‘House & Land Transaction Income Tax’ for Foreign Individuals
Foreign taxpayers in Taiwan—including non-residents, special visa holders, or those living abroad—face separate taxation for gains from house and land transactions. These are reported under the Liability of Property Gains Act provisions in Taiwan’s Income Tax Act. Importantly, the gain from these transactions is not included in your annual consolidated income. (mof.gov.tw)
Key triggers that require filing:
- The property or house use rights are acquired on or after January 1, 2016. (mof.gov.tw)
- Selling shares or capital in companies (domestic or foreign) where 50 % or more of the value is in property, with more than half of the shares or capital in your name or business. (mof.gov.tw)
- Applies even if there is no taxable gain or there is a loss. Filing is mandatory. (mof.gov.tw)
Rates, Deadline, and Penalties
| Holding Period | Tax Rate for Non-Residents / Foreigners |
|---|---|
| Less than 2 years | 45 % (mof.gov.tw) |
| 2 years or more | 35 % (mof.gov.tw) |
- Deadline: Within 30 days from the day after ownership-transfer registration, or after the transaction date if house rights/presales. Missing this leads to fines. (mof.gov.tw)
- Fine Range for late filing: NT$3,000 to NT$30,000. (mof.gov.tw)
What Counts as Deductible vs What Doesn’t
To compute income properly, you subtract:
- The original acquisition cost of the house/land.
- Necessary expenses directly related to acquisition, improvement, and fee/costs for ownership transfer. (mof.gov.tw)
Not deductible:
- House tax, land value tax while owning
- Interest payments on loans
- Management fees, cleaning, maintenance etc.
These expenses are not transaction-related. Overclaiming can trigger reassessment and additional tax. (mof.gov.tw)
Practical Example
- Ms. Wang (foreign national) acquired a property in Jan 2021, sold it in Sept 2024.
- Transaction price: NT$12,000,000
- Acquisition cost: NT$8,000,000
- Transfer fees / improvement costs: NT$1,000,000
- Holding >2 years → 35 % tax rate
- Income = 12,000,000 − 8,000,000 − 1,000,000 = 3,000,000
- Tax payable = NT$1,050,000
- If she mistakenly included non-allowed expenses (e.g. loan interest NT$40,000, house tax NT$60,000), tax authority will remove them and adjust upward. (mof.gov.tw)
Steps for Foreign Sellers to Ensure Compliance
- Determine acquisition date (must be on or after Jan 1, 2016 for rules to apply).
- Track all acquisition and transfer documentation to prove original cost, construction permits etc.
- Calculate income: price − cost − allowed expenses.
- File the return within 30 days of registration.
- Pay applicable tax rate based on holding period.
- Avoid claiming non-deductible items. Submissions without supporting docs may limit deductions to statutory percentages. (mof.gov.tw)
By carefully following these rules, foreign property sellers can minimize exposure to penalties, avoid surprises, and ensure that any tax liability is handled correctly and efficiently.