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The high price of real estate in metropolitan has become the first of top ten public grievances. To resolve this problem, the government implemented “The Specifically Selected Goods and Services Tax Act”, as well as simply called “Special Sales Tax”, or as “Luxury Tax”, which went into effect on June 1, 2011. Chupei, Hsinchu County possesses a manifold competitive advantages that derives from the rapid development in business, transportation, science and technology, cultural innovation, and leisure, which have pulled up the land prices continually in recent years. The real estate has been hot, and the house prices and the transaction prices attained record high. The study aims to discuss the influence of luxury tax upon Chupei’s real estate market by using qualitative research to obtain the following conclusions:
1.In this study, the majority of respondents support the imposition of the luxury tax while differ in opinions on the luxury tax rate; some people reckon that the rate is too high and should be levied by regions, but some consider it is too low to deter speculators hype.
2.In the wake of the imposition of the luxury tax, the number of speculators and investors decreased, and the transaction volume of real estate dropped. However, in Chubei City, there is no significant discrepancy in bank loans hence followed and the real estate prices did not decline. The main reason is that buyers and sellers assume a wait-and-see attitude in current situation, where bank mortgage rates remain low and most sellers have sufficient financial back-ups. housing prices still maintain a certain price to make profit, sellers will not cut the prices to attract buyers, and the luxury tax levied by a rate of 10% -15% will be passed on to the buyers.
3.Therefore, the housing prices will not fall. In the long term, the impact of luxury tax on the housing remains to be assessed and observed .
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