The land was auctioned by the court despite not wanting to sell it! The 20% discount on the unified property and land tax for co-owned landlords has failed

Even if the landowner does not agree to sell the land, it may not be eligible for the 20% discount on the combined real estate and land tax. (Schematic photo taken by reporter Zhang Yayun)

The land was auctioned by the court, and even though they clearly did not agree to sell it, they still had to pay a 35% real estate and land tax! A landowner shared land with others. Because the other co-owners filed a lawsuit demanding partition, the court ordered the land to be auctioned. The landowner originally thought that the sale was involuntary and would be eligible for a 20% preferential tax rate. Unexpectedly, he was found to be ineligible and was still taxed at 35% and made up for the tax. The tax rate differed by 15 percentage points.

The landowner purchased a piece of land that he shared with others in 2020. Later, the other co-owners filed a lawsuit to divide the common property with the court. The court decided to adopt the method of "change-price division", auction the entire land, and then distribute the auction proceeds to the various co-owners. The land was auctioned in 2023.

The landowner believed that he had never agreed to sell the land and it should be an involuntary transaction. Therefore, when declaring the combined real estate and land tax, he claimed that the 20% preferential tax rate should be applied. However, after review, the National Taxation Bureau determined that the land held for more than 2 years but less than 5 years must still be calculated at a tax rate of 35%, and a supplementary real estate and land tax must be levied.

They were also forced to sell their land, but the tax results were very different.

The Kaohsiung National Taxation Bureau pointed out that the same is shared land. If a majority of landowners decide to sell the entire land, even if a few landowners disagree, as long as it complies with the provisions of Article 34-1 of the Land Law, the 20% preferential tax rate can still be applied to the landowners who are forced to sell their shares. However, if other co-owners file a lawsuit with the court to divide the land, and the court finally decides to auction it, even if the landowner is unwilling to sell, he will not be able to enjoy the preferential treatment.

The Kaohsiung National Taxation Bureau stated that according to the provisions of the Real Estate and Land Integrated Tax 2.0, if an individual holds a real estate and sells it within 2 years, in principle, a 45% tax rate will apply; if it exceeds 2 years but does not exceed 5 years, the tax rate will be 35%. If it meets the involuntary factors announced by the Ministry of Finance and is held for less than 5 years and sold, a 20% preferential tax rate may be applied.

Taxes can be reduced if debts are foreclosed. Court rulings on division are not applicable.

The Kaohsiung National Taxation Bureau analyzed that if the property is forced to be auctioned by the court due to the inability to repay debts, including tax arrears, it is an involuntary sale announced. However, in this case, other co-owners petitioned to divide the land, and the court ruled that the price should be distributed after the auction. The purpose was to take into account the interests of all co-owners, so it did not meet the preferential conditions.

In addition, the 20% preferential tax rate may also be applied to those who are required to bear medical expenses due to job transfer, involuntary resignation, major injury or illness, or who sell their home place due to a usual protection order due to domestic violence, etc., if certain conditions are met. The Kaohsiung National Taxation Bureau reminds that the preferential treatment for involuntary sales is listed on the front. Even if the landowner does not agree to the sale, as long as the conditions of the announcement are not met, the preferential tax rate will still not be applicable.