Pre-Sale Home Transfer Sale Price Calculated on Actual Cash Paid, Taxation Bureau Reminds

The Central Taiwan National Taxation Bureau of the Ministry of Finance has issued a tax reminder on the transfer of pre-sale home rights. Because a pre-sale home has not been completed and handed over, determining the sale price in a transfer has its own particularities. Only the actual cash the transferee pays to the transferor counts as income, while the final payments the transferee later pays on their own to the developer or landowner fall outside the taxable scope of this transaction.

To illustrate with a case from the Central Taiwan National Taxation Bureau: Party A bought a pre-sale home with a contract price of NT$10 million, had already paid NT$1.5 million to the developer, and later transferred it to Party B in the name of NT$10.5 million. The actual cash Party B paid to Party A was NT$2 million, including the NT$1.5 million Party A had originally paid and NT$0.5 million in profit from it; the remaining balance is paid by Party B to the developer after taking over, so it is not part of the tax base for Party A's transaction.

Under the Integrated Housing and Land Income Tax rules, transfers of pre-sale homes acquired on or after July 1, 2021 must be reported within 30 days of signing the contract. If transaction expense receipts cannot be provided, expenses may be estimated and reported at 3% of the sale price, up to NT$0.3 million. The Taxation Bureau stressed that attention should be paid to how the sale price is determined, to avoid being assessed back taxes for a calculation error.