Property tax or tax relating to real estate transactions.
So long as a property is being used for private residential purpose these do not apply. However, upon ownership transfer, there are costs.
These fall into four following potential categories:
• transfer fee 2%
• specific business tax 3.3% (If the land’s owner transfers within 5 years)
• duty stamp 0.5%
• income tax ( to be withheld at source, the seller of real estate has an obligation to pay this tax with a progressive rate as stated by the Revenue Department).
However, if a company or a limited partnership is the transferer of the real estate, it has to pay a withholding tax 1 % of the selling price or estimated price of the Land Department, whichever higher.
This payment is considered as a tax credit for the company’s annual tax filling.
In practice the costs above, except income tax, will be split in some degree between the buyer and seller, depending on negotiation.
