Taiwanese real estate brokers hope that a new bill requiring that property taxes be based on transaction values on homes rather than on government assessments will help rein in runaway prices on real estate in Taiwan[1]. Usually government assessments are much lower than market prices. The gap in value “renders holding costs insignificant compared to transfer profits,” which can lead to price manipulation, says law director of H&B Realty Gary Wu. Wu added that prices have been further inflated by individual buyers who fail to accurately judge reports of price hikes and pay more than the property is actually worth. Taiwan has experienced a similar real estate market to that in China, but is hoping to rein in a potential bubble through legislation rather than strict lending and ownership regulation as China is attempting.
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[1] http://www.taipeitimes.com/News/biz/archives/2011/09/20/2003513679
Another idiot government. Just because some people pay more than you would does not mean that they are wrong and you are right. Willing buyer and willing seller. I suppose that some other entity will then try to correct the transactions and give refunds or demand more. Property assessments are not appraisals. They are incorrect on the individual and correct on the whole. For example, in my Florida county the assessor uses a value that is based on the age of the house. Multiply the square footage by that value (one value per decade) and voila, you have an assessment! Of course the lot price is added in and it is again a value per square foot. Amenities like a pool are added. One 2000 square foot home could be valued ad $120,000 and then sell for $80,000 or for $180,000. The $80,000 sale could simply be one in very bad condition. The $180,000 sale could simply be one in outstanding condition with lots of upgrades. The county does not consider condition at all. Trust me. I tried to make that case for a few homeowners in an assessment challenge. They go by age and square footage with no adjustment for condition. It is simply impossible and intrusive for a county to actually get into each home to value it. Say no to that if anyone suggests it. If Taiwan allows that change, they are in for a surprise. It won’t fix the problem, it will make it worse. The only thing that will change is the amount of tax. It will go up.