An individual who purchased two properties in 2024 and 2025, respectively, plans to sell the property acquired in 2024 in 2026. If the individual only registers their household at that property prior to the sale, can the “tax credit for repurchasing a self-use property” (hereinafter referred to as the “repurchase tax credit”) be applied when filing the House and Land Transactions Income Tax to reduce the tax payable?

The National Taxation Bureau of Kaohsiung, Ministry of Finance, expressed that, according to Paragraph 2 of Article 14-8 of the Income Tax Act, where an individual purchases a new “house and land for his self-use residence” (hereinafter referred to as “self-use property”) before selling the old property, the old property must be sold within two years from the date the ownership transfer registration of the new property is completed. Moreover, both the new and old properties must meet the requirements for “self-use property” in order to claim a proportional tax credit against the House and Land Transactions Income Tax payable. Furthermore, pursuant to Point 20 of the Directions for Filing the Income Tax on Consolidated Income from House and Land Transactions, a “self-use property” must meet the following requirements: the individual, their spouse, or their minor children must complete household registration at the property, actually reside therein, and the property must not be leased, used for business operations, or used for professional practice. Therefore, whether the transferred property qualifies as a “self-use property” depends not only on actual self-use, but also on the completion of household registration by the individual, their spouse, or their minor children at the property. If neither the new nor the old property has such household registration for self-use, the transaction will be deemed not to constitute a replacement of a self-use property, and the repurchase tax credit will not apply.

The Bureau provided an example: Party A acquired Property A in April 2019 and subsequently purchased Property B in March 2020. However, Party A did not transfer their household registration to Property A until February 2021, and sold Property A in May of the same year. Later, when filing the House and Land Transactions Income Tax, Party A claimed a repurchase tax credit of NTD 980,000. Upon investigation, the Bureau found that, although Party A asserted that they had resided at Property A prior to purchasing Property B in March 2020, neither Party A nor their spouse or minor children had completed household registration at Property A before February 2021. Accordingly, the Bureau determined that Party A did not meet the requirement of “having household registration and actual residence at the sold and the newly purchased properties” for self-use property. Therefore, the repurchase tax credit was not applicable, and the approved amount of the repurchase tax credit was NTD 0.

The Bureau reminds taxpayers that, when claiming the repurchase tax credit, special attention should be paid to ensuring that both the newly purchased and the previously owned properties meet the requirements of household registration and actual self-use by the owner, their spouse, or their minor children, so as to protect their rights and interests. If you have any questions, please call our toll-free service hotline at 0800-000-321 for assistance, or visit the Bureau’s website (https://www.ntbk.gov.tw) to make an online inquiry using the National Tax Administration’s smart customer service tool, “National Tax Assistant”. 

Provided by: Legal Affairs Division

Contact person: Section Chief Lin Shu-hui       Telephone: (07) 7256600 Ext.7510

Written by: Lin Chia-hua                                    Telephone: (07)725-6600 Ext.7522