Taiwan's real estate market surged after 2020. As the semiconductor industry boomed around TSMC, the world's largest foundry corporations, so-called "semiconductor money" flowed into the dwellings market. Home prices in the Hsinchu area, where TSMC is headquartered, more than doubled over the past five years. Saying it would curb real estate speculation and stabilize prices, the Taiwan government implemented "multiple-dwelling property tax 2.0," which toughened the holding tax on multiple homeowners, starting in Jul. 2024.
The results differed from expectations. The government thought that if it raised the tax burden, multiple homeowners would put their dwellings on the market and prices would stabilize. But with the heavy capital gains tax burden on top of that, landlords chose to hold rather than sell, and some of the increased tax burden was passed on as higher rents, analysts say. This is why assessments inside and outside Taiwan say the tougher holding tax led to fewer transaction and higher rents.
Taiwan and Singapore are cited as representative cases of applying a progressive tax rate to holding taxes by distinguishing nonresidents and multiple homeowners. Taiwan varies the tax burden based on the number of dwellings, while Singapore does so based on whether the property is owner-occupied. However, both countries apply lower rates to owner-occupied dwellings. Taiwan leaves certain avenues open for landlords who supply dwellings to the rental market. As debate over revamping Korea's holding tax resurfaces, some note that it is difficult to simply import the Taiwan and Singapore models.
◇ Taiwan: transaction down 25% and rents see biggest rise in 28 years
Like Korea, Taiwan has been regarded as a country with a heavy real estate transaction tax burden but a relatively low holding tax burden. Recently, however, it changed its system to strengthen holding taxes on nonresidents and multiple homeowners. The surtax rate on multiple-homeowner dwelling taxes rose from a maximum of 3.6% to 4.8%. The previously loose criteria for recognizing owner-occupied dwellings were tightened, and mortgage loan regulations were also strengthened.
The government expected that a heavier tax burden on multiple homeowners would bring their dwellings to market. But the opposite occurred in the actual market. In Taiwan, the capital gains tax rate for selling a short-term held dwelling can reach up to 45%. Even though holding taxes rose, the sizable taxes due at sale led landlords to choose to hold rather than sell.
Transaction plunged. According to the Central News Agency (CNA) and others, the number of real estate transactions in Taiwan in 2025—including dwellings, shops and offices—was 261,308, down 25.5% from the previous year. It was the lowest level in nine years since 2016. The transaction-boosting effect the government expected did not appear, and the market instead froze.
Rents also rose. Based on statistics from the Directorate-General of Budget, Accounting and Statistics under the Executive Yuan, industry tallies show Taiwan's dwelling rent index in 2024 increased 2.45% from a year earlier. It was the biggest rise in 28 years. Inflation, repair costs and management fees played a role, but there is also a view that part of the holding tax hike was passed on to tenants. This shows how tougher holding taxes can add strain to the rental market.
Workarounds to reduce the tax burden also emerged. Attorney Zeng Junwei of Ho-Cheng Law Firm in Taiwan said, "Multiple homeowners chose to lower their tax burden not by selling their dwellings, but by changing their registered residence or adjusting asset holdings within the family."
A measure the Taiwan government adopted to cushion the rental market shock is the registered rental dwelling system. Even multiple homeowners can reduce the dwelling tax rate to 1.2% if they register their held dwellings as social housing or public-interest rental housing. If they register as general rental dwellings and report rental income, a 1.5%–2.4% rate applies. The approach is to raise taxes overall but apply lower rates to landlords who supply dwellings to the rental market.
◇ Singapore, with a 90% owner-occupancy rate, has a different structure from Korea
Singapore's structure differs from Taiwan's. Singapore levies high holding taxes on nonresident rental dwellings but sharply reduces the burden on owner-occupied dwellings. It calculates the holding tax based on "annual value" (AV), the expected rental income from leasing a dwelling for one year. Owner-occupied dwellings are not taxed up to an AV of 12,000 Singapore dollars, after which a progressive tax rate of 0%–32% applies. By contrast, nonresident dwellings for rental or investment are taxed at a higher 12%–36%.
Lee Gwan-ok, a professor in the Department of Real Estate at the National University of Singapore Business School, said, "Singapore imposes high holding taxes on rental dwellings, but the holding tax burden on owner-occupied dwellings is low even among major global cities." Singapore's owner-occupancy rate is around 90%, and about 80% of all dwellings are HDB public housing. Lee said, "Even if rents on rental dwellings rise due to tax pass-through, most tenants are foreigners, so the government's political burden is relatively smaller," adding, "Korea is different because the share of domestic tenants is high."
Korea's housing structure differs from Singapore's. According to the 2024 Housing Survey, Korea's homeownership rate is 61.4%, and the owner-occupancy rate is 58.4%. More than four out of 10 households do not live in a home under their own name. In this situation, imposing high tax rates on nonresident rental dwellings could pass the burden on to tenants and raise the public's housing costs.
The capital gains tax structure also differs. Singapore has a heavy holding tax burden, but after a certain period it does not impose capital gains taxes regardless of the number of dwellings. In contrast, in Korea, multiple homeowners in designated regulation areas can face a capital gains tax rate of up to 82.5% when selling a home. If holding taxes are raised while leaving capital gains taxes unchanged, landlords are more likely to hold rather than sell or to raise rents. Taiwan's case illustrates this point.