Compliance
Understanding Taiwan’s CPI-Adjustment for Inherited or Gifted Old Regime Houses
Taiwan has issued a new regulation allowing CPI adjustments to the valuation of inherited or gifted old-regime houses when calculating taxable gains—crucial for property investors and heirs.
By NomadicTax Research Team • 5-8 min read • August 13, 2026
## What Has Changed
On **15 July 2026**, Taiwan's Ministry of Finance (MOF) released an explanatory order (台財稅字第11504549440號令) that allows individuals selling old-regime houses obtained by **inheritance or gift** to apply a **consumer price index (CPI) adjustment** to the assessed value at inheritance or gift in calculating taxable gains.([mof.gov.tw](https://www.mof.gov.tw/singlehtml/384fb3077bb349ea973e7fc6f13b6974?cntId=b6aff5ed614745e083ee1d992c4fefdc&utm_source=openai))
Previously, only houses falling under Taiwan’s new House-Land Combination (“房地合一”) tax regime could benefit from CPI adjustments in determining the value at inheritance or gift. Old-regime houses—those outside the new combined tax regime—did not have this benefit. This clarification enhances equity and reduces inflation-driven artificial gains.([mof.gov.tw](https://www.mof.gov.tw/singlehtml/384fb3077bb349ea973e7fc6f13b6974?cntId=b6aff5ed614745e083ee1d992c4fefdc&utm_source=openai))
## How It Works in Practice
Here’s the new mechanism:
- **When it applies**: For individuals selling an old-regime house obtained by inheritance or gift, **if actual sale price** or tax authority-verified transaction price is available. Otherwise the standard old-regime valuation rules continue.([mof.gov.tw](https://www.mof.gov.tw/singlehtml/384fb3077bb349ea973e7fc6f13b6974?cntId=b6aff5ed614745e083ee1d992c4fefdc&utm_source=openai))
- **Adjustment formula**:
1. Determine the “evaluated value” of the house at the time of inheritance or gift.
2. Adjust that value by the ratio of the CPI for the **sale month** over the CPI for the **inheritance/gift month**.
3. Deduct that adjusted basis, plus acquisition/improvement/transfer costs, from sale price to arrive at taxable gain.([mof.gov.tw](https://www.mof.gov.tw/singlehtml/384fb3077bb349ea973e7fc6f13b6974?cntId=b6aff5ed614745e083ee1d992c4fefdc&utm_source=openai))
## Example Scenario
- A property was **inherited in July 2010** when its assessed valuation was NT$5,000,000.
- It sold in **July 2026** for NT$8,000,000.
- CPI in July 2010 = 90; CPI in July 2026 = 135 (illustrative numbers).
- Adjusted inherited value = 5,000,000 × (135/90) = NT$7,500,000.
- Assume NT$200,000 in documented improvement costs and NT$100,000 in legal/transfer fees.
- Taxable gain = Sale price (8,000,000) − Adjusted basis (7,500,000 + 200,000 + 100,000) = NT$200,000. Without CPI adjustment, taxable gain would be 8,000,000 − (5,000,000 + costs) = NT$2,800,000—a much higher tax burden.([mof.gov.tw](https://www.mof.gov.tw/singlehtml/384fb3077bb349ea973e7fc6f13b6974?cntId=b6aff5ed614745e083ee1d992c4fefdc&utm_source=openai))
## Who Benefits & Potential Pitfalls
### Beneficiaries
- Individuals selling inherited or gifted property under old regime (i.e. outside “房地合一新制”).
- Estates and heirs subject to capital gains on real property transactions.
- Those whose inheritance/gift dates are far in the past—where inflation has significantly increased since.
### Drawbacks / Considerations
- Must be able to prove **assessed value** at time of inheritance/gift and **current CPI** figures.
- If actual sale/proof of original assessment missing, benefit may be limited—or use other valuation methods.
- Other gains (e.g. improvements costs) still need proper documentation.
## Compliance Steps
- Gather records of inheritance/gift date, assessed valuation or appraisal, and improvements/transfer costs.
- Obtain CPI series for relevant months (MOF publishes these).
- If sale price is verified by tax authorities, ensure full documentation to support claim under regulation.
- When filing, attach the explanatory order and explanation in your calculation to reduce risk of audit adjustments.
## Strategic Real Estate Tax Planning
- Families holding inherited or gifted homes may **delay sale** to benefit from cumulative inflation adjustments.
- When planning improvements or transfers, document carefully—costs in improvement and transfer matter.
- Consider now whether shifting property into new-regime (“房地合一”) status offers better long-term tax outcomes. But note old regime benefits for inheritance/gift with CPI adjustment may narrow any perceived advantage of switching.
## Conclusion
Taiwan’s new clarification makes old-regime real property taxation fairer by recognizing inflation’s effect on inherited or gifted properties. Whether you are an individual heir or a real estate investor, careful documentation and understanding of CPI adjustments can deliver meaningful savings.