Income or losses derived from transactions of house and land incurred by an individual provided in Article 4-4, where the house and land were originally acquired at a price, the amount of the income shall be the transaction price after deduction of the original cost and all expenses necessary for acquisition, improvement, and ownership transfer of that house and land; where the house and land were acquired through inheritance or gift, the amount of the income shall be the transaction price after deduction of the current value of the house and the assessed present value of land at time of inheritance or gift (which shall be duly adjusted with the price index announced by the government) and all expenses necessary for acquisition, improvement, and ownership transfer of that house and land. However, the land value increment tax paid in accordance with the Land Tax Act shall be excluded from the expenses, unless such tax paid is prorated to the part of the total amount of land value increment not being deducted from the amount of the income.
The amount of losses from transactions of house and land incurred by an individual is deductible from the income derived from transactions of house and land within three years from the day of transaction.
Income derived from transactions of house and land incurred by an individual calculated in accordance with the previous two Paragraphs, after deduction of the total amount of land value increment calculated in accordance with the assessed present value provided in Paragraph 1, Article 30 of the Land Tax Act shall not be added to the gross consolidated income. The tax payable shall be computed separately in accordance with the following tax rate:
1. An individual residing in the territory of the Republic of China:
(1) The transferred house and land that have been held for a period of no more than 2 years shall be taxed at 45%.
(2) The transferred house and land that have been held for a period of more than 2 years but no more than 5 years shall be taxed at 35%.
(3) The transferred house and land that have been held for a period of more than 5 years but no more than 10 years shall be taxed at 20%.
(4) The transferred house and land that have been held for a period of more than 10 years shall be taxed at 15%.
(5) House and land that have been held for a period of no more than 5 years and are transferred because of a job transfer, involuntary separation from employment, or any other involuntary cause announced by the Ministry of Finance, shall be taxed at 20%.
(6) An individual who sells house and land where the house is built in partnership with a business entity, and the share of land associated with the unit has been held for a period of no more than 5 years shall be taxed at 20%.
(7) House and the share of land associated with the house that are transferred for the first time after the completion of construction and have been held for a period of no more than 5 years, where the house and land are acquired through participation in urban renewal by providing land, legal buildings, other rights, or capital in accordance with the Urban Renewal Act or the participation in reconstruction in accordance with the Statute for Expediting Reconstruction of Urban Unsafe and Old Buildings shall be taxed at 20%.
(8) For income derived from transactions of self-use house and land conforming to the provisions of Subparagraph 1, Paragraph 1, Article 4-5, if the amount of income calculated in accordance with this paragraph exceeds NT$4 million, the income shall be taxed at 10% on the part of the income amount exceeding NT$4 million.
2. An individual not residing in the territory of the Republic of China:
(1) The transferred house and land that have been held for a period of no more than 2 years shall be taxed at 45%.
(2) The transferred house and land that have been held for a period of more than 2 years shall be taxed at 35%.
The holding periods stated in Subparagraph 1, Paragraph 1, Article 4-4 and Subparagraph 1, Paragraph 1, Article 4-5, where the house and land were acquired through inheritance or legacy, may be consolidated with the holding period of the decedent or the legator.