A luxury tax bill proposed by the Ministry of Finance has won the approval of President Ma Ying-jeou this week. It is designed to promote social justice by curtailing real estate speculation. And according to Premier Wu Den-yih, the new bill is expected to be passed by the end of June and may take effect in the second half of the year at the earliest.

President Ma has decided to impose taxes on consumers of high cost luxury goods and real estate speculators.

Minister of the Executive Yuan, Wu Den-yih, says that Taiwan is taking similar steps as Singapore and will begin levying taxes on real estate speculators who do not buy homes for personal use and instead resell the real estate within one or two years.

The move is part of an effort to discourage real estate speculation and investment and may be implemented as soon as the latter half of 2011.

Whether the move will have the desired effects on real estate speculation, Wu is optimistic.

Those who resell their homes within one to two years will be required to pay a 10 or 15% tax fee.

Luxury goods including real estate, goods priced over 3 million NT dollars, coral furs and other protected products over 500 thousand NT dollars, as well as country club memberships priced over 500 thousand NT dollars, will all bear a 10% taxation.

Regarding brand name bags and high cost jewelry that were not included on the list, Minister of Finance Lee Sush-der says that as these products are movable, there is difficulty in including them on the list.

Lee also says that the primary goal of the amendment is to discourage real estate speculation.

In addition, with the tax levy on luxury goods, the Ministry of Finance will get an additional 15 billion NT dollars in tax money.

The Ministry of Finance will comb through the new bill one last time before sending it over to the Legislative Yuan for approval.