National Taxation Bureau of Kaohsiung received a call from Ms. Chen, saying that the presale property (including the house and the share of land associated therewith) purchased thereby from a construction company on December 1st , 2018 and received on October 1st , 2020 (the title transfer registration date) was sold on August 1st , 2022. Ms. Chen asked that, in regard to individual house and land transactions income tax, how to calculate the possession period of said presale property?
The Bureau expressed that, according to Article 4-4 of Income Tax Act, income derived from transaction of house and land acquired after January 1st , 2016 shall be subject to individual house and land transactions income tax. As Ms. Chen obtained the title (ownership) of the said presale property on October 1st , 2020, she is subject to individual house and land transactions income tax when selling the said property on August 1st , 2022. The possession period of the said property should be calculated from the house/land acquisition date until the date of transaction, where the period between the signing of presale property contract and acquisition date shall be excluded. Therefore, as Ms. Chen sold the property on August 1st , 2022, her possession period of the said property should be 1 year and 10 months (from October 1st , 2020 to August 1st , 2022) with an applicable tax rate of 45% (possession period within 2 years).
The Bureau expressed that citizens who are subject to individual house and land transactions income tax due to the sale of their acquired presale property shall pay special attention to the calculation of the property possession period. Otherwise, taxpayers may adopt the wrong tax rate and fail to pay the full tax amount or be therefore penalized. Regarding the declaration of individual house and land transactions income tax, citizens are welcome to contact any branch or office of National Taxation Bureau; or dial the free hotline 0800-000-321 for detailed information.
Contact: Ms. Lee, Revenue Officer of the Second Examination Division
TEL: 07-7256600 ext.7257