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The policy of the short-term tax reduction titled “Land Value Increment Tax Cut in Half for Two Years” was enforced on Feb. 1, 2002 as the government considered it could boost the real estate market actively and product the locomotive effect that helped stimulate the economic recovery, benefit to set off dead debt for financial constitutions, improve the ability of extricating the present plight, and alleviate the plight of sagging business.
This practice of the short-term policy expired in Jan. 2004. In view of the exploration into the issue if it can apply the incentive of tax exemption to stimulate the delitescent supply of real estate market to achieve the anticipated effect in the mid of sagging economic development, this study takes Hsitun District and Nantun District of Taichung City as the scope of research, collecting the data of 41,355 lots of lands for land transfer dated Feb. 2000 to Jan. 2004, during which the short-term policy was enforced, to make an integrated collation on the transaction about the term to hold the land for sale, reasons of transfer, area and the price-hiking amount from Application for Land Value Increment Tax Declaration along with the comparison and analysis of number of case, average term held, average transfer amount, average rate of increase and average transfer area for a further verification of the substantial influence of such practice. Findings of this study show that the marked increase of cases of land transfer, the release of lands held in long term, a trend of small average transfer area for the released lands, the increase of average amount (total amount) for the released lands, and the small average transfer area for the released lands after the practice of such short-term policy.
Notwithstanding the fact verified in this study that the real estate markets in Hsitun District and Nantun District of Taichung City have been boosted after the practice of the policy “Land Value Increment Tax Cut in Half for Two Years”, the issue concerning the factors which may have effects upon the economic recovery for the real estate market in the two areas due to the favorable condition of location and the issue if the short-term practice of “Land Value Increment Tax Cut in Half for Two Years” that has produced marked effect to Taichung City can have the same effect to other areas, such cities and counties with less metropolitan development, in Taiwan are still pending on further in-depth research. The future research practiced in questionnaire survey combined with the survey of land and financial administration applied by researchers from the perspective of production and consumption can further verify the level of influence upon the practice of the short-term administration as well as offer reference for government in the evaluation of similar short-term enforcement in the future.
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