Secretariat, Taipei City Government

This clarification was made by the Department of Finance of Taipei City Government (TCG) in answering city counselors' questions on TCG's deliberation on reducing taxes on luxury residences.

The markup of house tax on luxury residences were configured based on the house tax increasing ratio in accordance with the property's location (location ratio). The mentioned calculation method raised the doubt for double counting, since the approved unit prices of luxury residences had been increased in reference to the location ratio.

To avoid the circumstance that construction costs varied with different locations, the approved unit prices of luxury residences were considered to be calculated based on fixed increasing ratio in the future. This approach had been applied to the properties of cottage type. As for calculating the current value of luxury residences, the previous location ratio method is still used so as to highlight the market value of locations. The increasing ratio will be set and modified after reviewing public opinions and advice. The city's Real Estate Assessment Committee will review the proposal through the regular meetings in 2017, and it will be implemented after deliberation.

The formula of calculating the house tax on luxury residences:
1. House tax = The current value of the house × Tax ratio
2. The current value of the house = The approved unit price × Area × (1-Years of depreciation × Depreciation ratio) × Location ratio
3. The approved unit price of the luxury residence = The standard approved unit price × (1+Location ratio± Modification rating )± Modification value of high or low floor