Did you sell your house last year? Be careful to include it in your income tax return in May! Moreover, in order to combat short-term real estate speculation, the government will implement the unified real estate and land tax 2.0 starting from July 2021. As long as the house is sold within 5 years of purchase, a heavy tax of 35~45% will be imposed. If you fail to report it carefully, you will be fined 3 times. ! However, people who are forced to sell their houses can use a lower tax rate of 20% if they meet eight circumstances and related requirements, including unemployment, job transfer, involuntary resignation, etc.
Extended reading: 2024 comprehensive tax refund package for lazy people!Check out the first batch of 7/31 tax refund qualifications and payment methods at once
The personal real estate integrated income tax was revised on July 1, 2021. The resale tax rate within 2 years of holding the transaction is 45%; the resale rate within 2 to 5 years is 35%. Only after more than 5 years can the tax rate below 20% be applied.
Selling a house due to job transfer must meet two requirements to be exempted from heavy tax
Considering that people may be forced to sell their properties due to work assignments, the Ministry of Finance stated that individuals or their spouses buying houses at their place of work aretransferorComply with involuntary resignation as stipulated by laws and regulationswho are required to leave their original place of work and sell real estate held for less than 5 years, can pay a combined real estate and land income tax at a lower tax rate of 20%.
The Ministry of Finance and the Northern District Taxation Bureau previously reminded people that due to factors such as transfers and involuntary resignations, they must sell real estate held for less than 5 years.Must also meet 2 requirementsthe lower tax rate of 20% is applicable to the real estate and land integrated income tax, including: I or my spouse pays the real estate income tax“Complete household registration” and “reside”,and“Not for rent, for business or business use”.
Another six situations are also exempt from heavy taxation
In addition to the above two situations, there are six exceptions that may exempt you from heavy taxation.
-
Others cross the boundary to build a house
-
Enforced according to law
-
Need to pay medical expenses due to serious illness or accident
-
Obtaining a general protection order to escape a domestic violence partner
-
Part of the jointly owned premises was sold by other co-owners without consent
-
Due to inability to repay the principal and interest of the mortgage loan on the inherited property
In the above 6 situations, the 20% tax rate can also be applied to the combined real estate and land income tax.
The 20% tax rate is not applicable to those who have not completed household registration.
In addition, please note that it does not apply if you have not completed household registration. The Ministry of Finance gave an example. Mr. A worked in place A and purchased real estate in October 2017. In July 2010, he was transferred to work in place B by the company. Therefore, the real estate was sold. Mr. A paid 20% of the tax rate applicable to the transfer. The income tax on the integration of real estate and land has been determined by the bureau as a supplementary tax of 35% based on the fact that neither Mr. A nor his spouse has registered a household registration in the real estate, and the real estate has been held for more than 2 years but not more than 5 years. Tax amount.
The applicant was dissatisfied and applied for review, claiming that he originally lived in the house and was transferred to location B due to company policy arrangements. Therefore, the sale of the property should be taxed at a tax rate of 20% applicable to the transfer. The bureau determined that Mr. A himself or his spouse had not If you apply for household registration at the property and rent out the property without actually living in the property, it does not comply with the provisions of the Ministry of Finance announcement and may be taxed at a tax rate of 20%, and will be reviewed and rejected.
The Ministry of Finance also reminds you that if an individual sells real estate within the scope of the combined real estate and land income tax, regardless of gains or losses, and whether the sale is voluntary or involuntary, the holding period and applicable conditions of the real estate should still be confirmed in detail. tax rate, and pay the real estate and land tax within 30 days from the day after the ownership transfer registration date to avoid penalties.
Listing fees for pre-sold homes and existing homes are different
Yongqing real estate expert Chen Junhong reminds that not only the sale of existing houses, but also the resale of pre-sale houses must declare and pay the real estate tax in accordance with the law. In addition, when calculating profits, the itemized deductions for pre-sold houses are different from those for existing houses. When declaring the combined real estate and land tax, the transfer fee can be used to deduct the income without any supporting documents.
-
The calculation method for deductible expenses for existing house transactions is 3% of the “total selling price of the house”, with a maximum limit of NT$300,000;
-
The deductible expenses for pre-sale houses are calculated as 3% of the “total selling price – total purchase price + payment already made”, with the same maximum limit of NT$300,000.
As for the combined real estate and land tax to be paid on pre-sold houses, it is the same as that for general housing transactions. The highest tax rate of 45% is levied on the profit income based on the holding period.
Chen Junhong said that the combined real estate and land tax imposes a heavy tax on the short-term sale and purchase of houses. If the owner resells the pre-sale house held within 2 years, the income tax rate will be as high as 45%. Chen Junhong gives an example, if the owner purchases a pre-sale house for a total price of 10 million yuan before June 30, 2023, and sells the pre-sale house for a total price of 11 million yuan within two years, and has paid 1 million yuan for the project , the deductible expenses are 3% of “1 million yuan (total house selling price – total purchase price) + 1 million yuan (paid)”, which is 60,000 yuan. Therefore, the amount of combined real estate and land tax payable is 45% of “1 million yuan (total selling price – total purchase price) – 60,000 yuan (deductible expenses)”, which is 423,000 yuan.
