Parking Spaces and Shelters Used as Homes May Face Up to 4.8% Housing Tax, Effective Next Year

According to the Central News Agency, some citizens have been using parking spaces or air-raid shelters under their names as residences, raising concerns about public safety. The Ministry of Finance (MOF) announced amendments to regulations today, authorizing local governments to set differential housing tax rates for such practices, with a maximum rate of 4.8%. The rule will take effect on July 1 of this year, meaning it will apply when paying housing taxes next year. The MOF amended parts of the "Regulations Governing the Determination and Declaration of Residential Housing Units under Article 5 and Article 15, Paragraph 1, Subparagraph 9 of the House Tax Act." The MOF explained that after the new "2.0" nationwide housing tax differential rate system was implemented on July 1, 2024, some local governments argued that properties listed as parking spaces or air-raid shelters in usage permits, which were converted to residential use without approval from building management authorities, affect evacuation effectiveness and parking space availability. This potentially creates public hazards and increases social costs, justifying a different tax burden compared to legally used housing. The MOF stated that since house tax is a local tax, it adopted the opinions of local governments and amended the relevant regulations to include unauthorized use changes as a criterion for differential tax rates, effective July 1, 2026. The current "2.0" housing tax system uses a "nationwide aggregation, progressive" method, with tax rates for non-self-occupied homes ranging from 2% to 4.8%. The MOF provided an example: if a person owns five non-self-occupied homes nationwide, and one is an unauthorized converted parking space, that unit could be subject to the maximum 4.8% rate, while the others would be taxed based on the total number of homes owned.