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The rising property prices have caused a lot of complaints from the society over recent years. In order to appease the public and curb the speculation in the real estate market, the Taiwanese government implemented the integrated housing and land taxations in January 2016. The purpose was to achieve taxation fairness and rectify the housing market.
This paper examines the impact of the integrated housing and land taxations since January 1, 2016 on the number of transactions and the average selling price per unit in the six administrative zones in Taichung City (i.e. Dali, Taiping, Beitun, Xitun, Nantun and Fengyuan). The empirical study indicates that the average number of transactions has not changed much one year before and after the effectiveness of the new taxation scheme. In other words, the trading volume did not show a significant decline. However, the change in the number of transactions across the administrative zones two years before and after the new system is statistically significant. This suggests a noticeable reduction in trading volumes due to the expectation of the new tax regime two years in advance. However, the average selling price per residential unit did not show any significant decline after the implementation of the integrated housing and land taxation. This is possibly because investors in the real estate market in Taiwan focus on the northern region. Therefore, the effects of the housing policies are muted in the central region are muted, in comparison with the northern region where property prices are high.
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