In 2009, Taiwanese Government cut inheritance tax down to 10%. This results of oversea Taiwanese capital shifting back. However, in a condition of lacks of investment tool, combing with risks consideration, optimistic on economy and seeking real estate as a good hedge against inflation, real estate market became a popular financial products and result in price rising in real estate market.
Stressed of social aspects and rising in real estate price, Taiwanese government starts to implement different policies. Since 2009, here are more and more polices and bills such as the Mansion Tax, Luxury Tax, Nett login, Desirable Residential and Selective Credit Control polices, etc. are being implemented for controlling price rising in real estate market. In this study, Taipei and New Taipei Cities are studied groups for metropolitan area real estate market. To test the desirable effects of real estate market, event study methodology is applied in this study to compare different policy/bill exploration, legislature through the formal implementation of the point in time such as the rate of home sales and existing home transfer changes in quantity.
After analysis of empirical results, this study is summarized as following:
To curb rising price in real estate market, different polices reveals in different levels of efficiency. In an order from most efficient to the least, Nett Login plays as the most powerful policy and Luxury Tax is the next, followed by Mansion Tax, Appropriate Residential and finally the Selective Credit Control. Since Nett registration policy is overall the best policy, this study suggests it can be applied as the future taxable basis and to exclude the real estate information asymmetry. Furthermore, the Luxury Tax works out in short-term also because it taxes transactions within two year; however, it only targets about 2000 households in Great Taipei area and declaration seems to be the mainly focus of this policy. Appropriate Housing Policy increases in supply housing, but only affects in the region with the similar products. And impacts of Selective Credit Control are also limited because current interest rate is at a relatively lower point. Thus, above three polices are relatively inadequate in controlling price rising in real estate market.