HuWei Office, National Taxation Bureau of the Central Area, Ministry of Finance, stated that transactions of a Presale House with its Building Location acquired after January 1, 2016, starting from July 1, 2021, are considered real estate transactions. The transaction price should be the amount paid by the transferee to the transferor, and the transferor must declare the Tax on the Income Derived from Transactions of House and Land to the National Taxation Bureau located at their place of household registration within 30 days of the transaction date.

The Office audited the House and Land Transactions income Tax on presale houses and found that many cases requiring supplementary tax payments were due to a failure to submit supporting documents. Expenses were calculated at 3% of the transaction price, but the total correct price was incorrectly used as the transaction price. The correct transaction price should be the amount paid by the transferee to the transferor, excluding any subsequent payments made by the transferee to the construction company (landowner). For example, Mr. A purchased a Presale House with its Building Location for NT$10,000,000 in January 2025 and resold it for NT$10,500,000 in March 2026, making a profit of NT$500,000. He had already paid NT$1,500,000 to the developer. Without providing proof of expenses, the Tax on the Income Derived from Transactions of House and Land should be as follows:

Income: NT$2,000,000 (NT$1,500,000 paid + NT$500,000 profit)
Cost: NT$1,500,000
Expenses: NT$2,000,000 × 3% = NT$60,000
Tax payable: (NT$2,000,000 – NT$1,500,000 - NT$60,000) × 45% = NT$198,000.

The Office further reminds that for a Presale House with its Building Location income recognition, the actual amount received should be considered income, and the actual expenses should be reported as costs. Furthermore, if no proof of the transaction can be provided, when reporting expenses at 3% of the transaction price, it should be noted that the transaction price is the amount paid by the transferee to the transferor, not the total price of the transfer contract, to avoid being subject to tax adjustments by the tax authorities.

If you have any questions, please call our toll-free service number 0800-000321 for consultation, and we will do our best to serve you. 

Contact Person: Individual Income Tax Section, Ms. Cao
Tel: (05)633-8571 ext. 201.