The National Taxation Bureau of Taipei, Ministry of Finance announced that to ease the financial burden on renters, effective January 1, 2024, taxpayers, their spouses, and lineal dependents who do not own any residential property in Taiwan and who must rent a home for self-use (not for business or professional purposes) may claim a special deduction for rental expenses. After subtracting any government rental subsidies received, each tax-filing household may deduct up to a limit of NT$180,000 per year.
The Bureau explained that, to implement the policy intention of supporting those without homeownership, the President promulgated amendments to Article 17 of the Income Tax Act on January 3, 2024. Rental expenses were reclassified as a special deduction, making them available even to taxpayers using the standard deduction. The deduction cap was raised from NT$120,000 to NT$180,000, and a new wealth exclusion clause was added (taxpayers taxed at rates of 20% or higher, those choosing the 28% separate tax rate for dividends, and those whose basic income exceeding NT$7.5 million).
Considering some special practical circumstances where individuals own a house but still need to rent elsewhere for living, the Ministry of Finance’s ruling Explanatory Decree No. 11304656750 on December 3, 2024, interpreted five specific situations. These include: damage or destruction to the owned house, acquiring a co-owned house through inheritance where the person’s shareholding does not constitute the entire ownership, and the need to rent elsewhere due to employment, schooling, or medical reasons, with a combined ownership of only one house. In these situations, the taxpayer-owned house can be regarded as not being a self-owned house, allowing them to still claim the special deduction for house rental expenses for the house they rent elsewhere.
The Bureau provides the following example: Mr. A owns a house in Taipei. His two children, B and C, attend universities in Hsinchu and Taichung. In 2024, both B and C rent accommodations near their schools, with B’s annual rent at NT$120,000 and C’s annual rent at NT$96,000, for a total rent of NT$216,000. If Mr. A, his spouse, and their lineal dependents collectively own only one property, they may claim the maximum deduction of NT$180,000.
The Bureau would like to remind taxpayers that when claiming the special deduction for rent for housing, they must provide the rental agreement, proof of rental payments, and either household registration at the rental address or a signed declaration stating the premises are for self-residential use and not for business or performing professional services. If taxpayers meet one of the five specific conditions deemed as “not self-owned” as per the Ministry of Finance’s ruling, they must also provide the relevant supporting documents for review by the Bureau. For assistance, taxpayers may call the toll-free service hotline at 0800-000-321. The Bureau will be ready to assist you.
（Contact: Ms. Su, Head of Individual Income, Estate and Gift Tax Division; Tel: 02-23113711 ext. 1560）