Housing costs continue to move higher around the state. Across the Pacific, there’s an island that has taken a pretty radical step to try to control inflation when it comes to housing prices. HPR’s Bill Dorman has more in today’s Asia Minute.
If you think housing prices have spiked higher in Hawai‘i, take a closer look at Taiwan. Residential real estate prices on that island have tripled over the past dozen years. The government has been concerned about housing affordability—and now has taken steps to curb speculation. Taiwan’s lawmakers just passed a measure that would greatly increase capital gains taxes on property sales. If someone buys a residence and then sells it again within a year, the tax rate on any profit would be a whopping 45%. That’s triple the current rate. Property owners who have stayed in their residences for six years will get a tax break---and the higher rates kick in only after about $130,000 in profit. Still, the new law, which takes effect in January, should discourage property flippers looking for a quick profit. But it’s not likely to turn around the housing market by itself. Taiwan’s capital of Taipei has been especially hard hit by housing inflation…government figures show home prices cost about 15 times the average income—higher than Sydney and nearly on par with Hong Kong. Meanwhile, economists say income levels in Taiwan have remained stagnant for the past ten years.
