Ms. Li from Kaohsiung City called to inquire, is there any tax preference for the self-use residential house and land transaction after January 1, 2016?

The National Taxation Bureau of Kaohsiung, Ministry of Finance stated that for self-use residential house and land meeting the following conditions, the taxable income within NT$ 4 million will be exempt from income tax, and the extent of the taxable income exceeding NT$ 4 million will be taxed at the minimum tax rate of 10%: 

1. The individuals, their spouses, and minor children have maintained household registration at the house and owned it for 6 consecutive years.

2. Within the 6 years before its sale, the house and land have never been used for lease, business operation, or professional practice.

3. The individuals, their spouses and minor children have never applied for the provision in the last 6 years before the sale.

For example, the Bureau stated: Ms. Li bought an self-use residential property on April 1, 2016 at a cost of NT$12 million, and it was sold at a price of NT$20 million after six years, with the acquisition, improvement and transfer expenses of NT$2 million and the total amount of land value increment of NT$ 1 million. If the applicable conditions of the self-use residential property tax preference are met, the tax payable is calculated as follows:

Taxable income of NT$ 5 million = Transaction price of NT$ 20 million - Cost of NT$12 million -Expenses of NT$2 million -the total amount of land value increment of NT$ 1 million 
（Taxable income of NT$5 million- NT$4 million ) × 10% = Tax payable of NT$ 100,000.

Contact: Second Legal Affairs Division, Mrs. Shen

TEL: 07-7256600 ext.8703