The National Taxation Bureau of Taipei, Ministry of Finance, stated that individuals who have changed the use of self-owned property and been granted a repurchase deduction or tax refund should not use the newly acquired self-use property for any other purpose, nor should they transfer it within five years. Otherwise, the National Taxation Bureau will reclaim the aforementioned repurchase deduction or tax refund amount.

The Bureau explained that the repurchase deduction or tax refund incentive for house and land transaction income tax should comply with the following conditions, regardless of whether the property was sold before or after the repurchase: 1. The sale of the old property and purchase of the new property must be registered within two years. 2. The individuals, their spouse, or minor children should have their household registration recorded at both sold and repurchased properties and prove their residency therein. 3. The sold and repurchased property must not have been used for lease, business operations or professional practice. Moreover, to avoid speculation and to protect the rights of self-use, if the repurchased property has been used for other purposes or transferred, the National Taxation Bureau will reclaim the initially deducted or refunded tax amount.

The Bureau provided an example: Party A purchased Property A in September 2019, registered it as his residence and lived there. In May 2021, Party A sold Property A for NT$12,500,000; and, at the end of the same month, Party A purchased Property B for NT$16,650,000 and registered it as his self-use residence, complying with the "buying after selling" condition. Since Party A purchased Property B within two years after the transfer of Property A, and both properties have been registered under Party A's household without being used for lease, business operations, or professional practice, plus the purchase price of Property B (NT$16,650,000) exceeds the selling price of Property A (NT$12,500,000), Party A calculated that the tax payable for selling Property A (approximately NT$100,000) could be deducted for the repurchase of self-use property without needing to pay house and land transaction income tax. Nevertheless, Party A sold Property B in July 2022, which occurred within five years after the change of self-use property. As a result, the Bureau reclaimed the initially deducted tax amount of approximately NT$100,000 from Party A. Disagreeing with this decision, Party A requested a review, arguing that the sale of Property B in 2022 was driven by personal financial reasons rather than for profit from resale. Party A urged the Bureau to reconsider and revoke the reclaimed amount. However, the review application was rejected by the Bureau. The Bureau emphasized that the initially deducted or refunded tax amount should be reclaimed by law since the sale of the newly purchased property (Property B) occurred within 5 years, and this is unrelated to any profitability gained by individuals from the sale of repurchased property.

The Bureau reminded that if the change of self-use house and land (whether sold before or after repurchase) qualifies for the repurchase deduction or tax refund for house and land transaction income tax, the newly purchased self-use property should not be used for other purposes or transferred within five years after the change of self-use property. Otherwise, the taxpayer will be required to repay the initially deducted or refunded tax amount. Therefore, the Bureau advises people to pay special attention when selling their property to protect their rights and interests. If you have any problems related to filing house and land transaction income tax, you are welcome to contact the taxation bureau of your household registration to ensure accurate tax filing. 

(Contact person: Section Chief Hung from Department of Legal Affairs; telephone: 2311-3711 Ext. 2051)