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Following the global financial meltdown in 2008, countries worldwide began to adopt low interest rates, while two of the world’s biggest economies, the United States and the European Union, also resorted to quantitative easing, generating enormous capital inflows into the market. With low property transaction taxes, Taiwan’s real estate market attracted large speculative funds, resulting in steep hikes in home prices that most salaried families could no longer afford. Taiwan housing justice has become a major public concern in recent years.
In order to cease the social complain, Taiwan Central Government tried to keep down the price level of the domestic real estate market from further rising. Firstly, by the end of 2011 the Minister of Finance initiated the Luxury Tax policy. After that, the Central Bank promoted a series policy to restrict the mortgage coverage through credit control. Later on, the Minister of Finance brought out the tax policy of luxury residence building to attack those of house investors. However, this series of policies to intervene the domestic real estate market could only achieve the quantity control, but are unable to prevent price level of the real estate market from further rising.
In response to public discontent with soaring home prices, the Legislative Yuan passed the Individual House and Land Transactions Income Tax Act, some draft amendments, The Specifically Selected Goods and Services Tax Act, Article 6-1 draft amendments on June 5, 2015, and on the 24th in the same month the president promulgated these laws coming into force since January 1, 2016. In this amending, abandoning the old system based on the principle of tax collecting efficiency, the provision of fiction price to calculate Income Tax and changed to impose from the transaction of housing and land which based on market price.
It is the most significant change in recent years in the history of the tax system. With introduce the real estate tax system of Taiwan, Hong Kong, Singapore, Japan and China, understand relevant regulations of real estate tax system in these countries and compare their similarities and differences, as a reference for the future amendment of the real estate tax system. The background, regulations, and legal nature of the Individual House and Land Transactions Income Tax Act are described in order to fully understand the entire real estate tax system and the Individual House and Land Transactions Income Tax.
Given that taxation is the deepest intervention in regard to people's property rights, law makers and tax colleting agencies must not explain or enforce the regulation in such a way that transcends the basic protection of people’s property rights as granted by the Constitution; nor should it transcend the legal principles of taxes. Based on the limitations and principles imposed by the Constitution on tax systems, and the basic legal principles related to tax as reference, this thesis aims to clarify whether or not the Individual House and Land Transactions Income Tax Act and the disputes over relevant regulations goes against the limitations and principles imposed by the Constitution on tax systems, and the fundamental legal principles of tax laws. It is expected that suggestions generated from the results will serve as a reference for the handling of relevant disputes or future amendments of the Act.
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