Upcoming election, new joint tax slow home buying plans, according to poll


CNA

TAIPEI — The upcoming presidential election and the coming into force of a joint tax on housing and land sales on Jan. 1 have slowed or suspended most potential buyers’ plans to purchase houses, according to a poll.

A total of 55 percent of home buyers said they will slow or put off their plans to buy houses in the first half of 2016, according to the poll released by property website Apple House.

Only 17 percent believe that the first half of 2016 is a good time to buy homes. Fifty-one percent think that the second half of 2016 is a good time, while 32 percent believe that 2016 is not an ideal year for home-buying, the poll shows.

Yeh Kuo-hua, general manager of Apple House, said home buyers will not be very willing to buy houses in the first half of this year unless they are completely satisfied with the prices.

The housing market is likely to warm up again in the second half of the year because housing policies will become clearer after the Jan. 16 presidential and legislative elections, and because the joint tax on building and land sales will have been implemented for some time, easing market concerns, he said.

Meanwhile, home buyers and sellers are widely divided over housing prices in the coming year.

Seventy-six percent of home buyers believe that housing prices will further drop in the first quarter of 2016 or over the entire year. Among home sellers, only 28 percent see such a first-quarter drop, while 32 percent expect prices to go down over the year, according to the poll.

A total of 23 percent of home sellers even believe that housing prices will increase this year, the poll shows.

But Yeh said that is unlikely to happen because of the slow economy and the heavy selling by speculators and attempts by builders to sell off their remaining units after the removal of the luxury tax on Jan. 1, when a new joint housing and land tax took effect.

Introduced in 2011, in an attempt to keep housing prices in check, the luxury tax levied a 15 percent sales tax on second homes sold within one year of purchase and a 10 percent tax on properties sold between one and two years after they had been purchased.

In conjunction with the removal of the luxury tax, lawmakers have passed the joint housing and land tax to take on speculators by imposing a maximum 45 percent capital gains tax on people who sell their homes within one year after purchasing them, and a 35 percent tax on houses sold between one and two years after purchase.

The Apple House poll was conducted between Nov. 6 and Dec. 11. Survey questions were sent to the approximately 20,000 members of the property website and 624 effective samples were collected.

The poll had a confidence level of 95 percent, and a margin of error of plus or minus 3.86 percentage points.