A. Tax Scope
Article 2 of the Statute on the Deed Tax provides that for transactions involving purchases and sales, acceptance of dien, exchange, bestowal or partition of immovable property, or acquisition of ownership thereof by virtue of possession, a report shall be made by using the prescribed deed forms for payment of the deed tax. However, if the land is located in an area where land increment tax is assessed, the deed tax shall be exempted.
So-called immovable property refers to both the land and the fixtures on the land. However, since now the appraisal of land value has been completed for all the land in the Taiwan area and the land value increment tax is assessed for transfer of land title or creation of dien, the deed tax is collectable in practice in the ROC only upon such immovable properties as a house or building and other fixtures on land.
The taxpayers of the deed tax are those who acquire the title to or dien of the immovable properties, as described below in accordance with the respective deeds:
- Deed tax on a purchase: To be reported and paid by the purchaser.
- Deed tax on the creation of a dien: To be reported and paid by the dien-holder.
- Deed tax on an exchange: To be reported and paid by each party to the exchange on the portion allocated to each party.
- Deed tax on a bestowal or a donation: To be reported and paid by the donee.
- Deed tax on a partition: To be reported and paid by the partitioner.
- Deed tax on a possession: To be reported and paid by the person who takes possession of the immovable property and legally acquires its ownership.
C. Tax Rates
The deed tax is assessed according to respective deeds at different rates, as described below:
- Tax rate
a. Deed tax on a purchase and sale: 6% of the value of the deed.
b. Deed tax on creation of a dien: 4% of the value of the deed.
Where immovable property is first placed under a dien and then sold and the dien-holder and the purchaser are the same person, or the dien-holder acquires the ownership of the property through a dien, the deed tax at a rate of 2% of the value of the deed for the original dien shall be assessed so as to make up the difference between the deed tax on a purchase and sale and the deed tax on the creation of a dien.
c. Deed tax on an exchange: 2% of the value of the deed.
In the event that there is payment for the discrepancy in the exchange values, the deed tax shall be imposed upon the difference at the rate set forth for the deed tax on a purchase. If the value of each of the exchanged properties is different but there is no payment for this discrepancy, the deed tax on an exchange shall first be imposed on the basis of the exchanged property the value of which is lower, then the difference between the property of higher value and the property of lower value shall be deemed as a donation made to the party originally owning the lower value property by the party originally owning the higher value property for assessment of the deed tax on a donation.
d. Deed tax on a bestowal or a donation: 6% of the value of the deed.
e. Deed tax on a partition: 2% of the value of the deed.
f. Deed tax on a possession: 6% of the value of the deed.
2. Calculation of the tax
The amount of the deed tax is calculated by multiplying the applicable tax rate by the value of the deed which is the standard price as determined by the real estate assessment committee of the local government. In the case of publicly-owned property purchased or bid from the government agency or immovable property acquired at court auction, and where the purchase price is below the standard price, the deed tax shall be imposed on the purchase price.
Introduction to local taxes is abstracted from” Guide to ROC Taxes 2011”.