Tax Benefits for Real Estate Investors in Taiwan

Published on October 3, 2025 and written by Cyril Jarnias

Taiwan real estate represents an attractive investment opportunity for international investors, particularly due to its tax benefits. This article explores in detail the various tax aspects that make Taiwan a preferred destination for real estate investment, compared with other countries in the region.

A Local Tax System Favorable to Real Estate Investors

The Taiwanese tax system offers several advantages to real estate investors, whether local or foreign. These benefits help make the Taiwanese real estate market particularly attractive for investors seeking attractive returns and favorable tax treatment.

Rental income tax in Taiwan is relatively low compared to other developed countries. Rental income is taxed at the progressive individual income tax rate, ranging from 5% to 40%. However, investors can benefit from significant deductions, particularly for maintenance expenses, loan interest, and property depreciation, which significantly reduces the taxable base.

Additionally, Taiwan offers specific tax incentives for certain types of real estate investments. For example, investors who acquire properties in designated development zones can benefit from temporary tax exemptions or tax reductions. These measures aim to stimulate economic development in certain regions and can represent an interesting opportunity for savvy investors.

Another notable tax advantage is the absence of wealth tax in Taiwan. Unlike some European or Asian countries, real estate investors in Taiwan are not subject to annual taxation on the total value of their real estate assets. This feature allows investors to build a substantial real estate portfolio without being penalized by additional taxation on their wealth.

Advantageous International Taxation: Double Taxation Avoidance Agreements

Taiwan has concluded numerous double taxation avoidance agreements with various countries, which enhances its appeal to international real estate investors. These agreements aim to prevent real estate income from being taxed twice, once in Taiwan and once in the investor’s country of residence.

Taiwan’s tax treaty network extends to more than 30 countries, including major economic partners such as Japan, Canada, Australia, and several European countries. These agreements generally allow investors to benefit from reduced tax rates on rental income and real estate capital gains realized in Taiwan.

For example, for a French investor, the double taxation avoidance agreement between France and Taiwan stipulates that real estate income is taxable in the country where the property is located (Taiwan), but can be taken into account for tax calculation in France. This means that the French investor can benefit from Taiwan’s advantageous tax rates while avoiding double taxation in France.

Furthermore, these agreements often facilitate the exchange of tax information between signatory countries, which contributes to transparency and legal security for international investors. This transparency is particularly appreciated in the current context of combating tax evasion and money laundering.

It is important to note that Taiwan continues to expand its tax treaty network, regularly negotiating new conventions with other countries. This active international tax policy demonstrates Taiwan’s commitment to attracting foreign investors and facilitating international capital flows into its real estate market.

Property Tax and Housing Tax in Taiwan: A Balanced and Competitive System

The property and housing tax system in Taiwan is designed to be both fair for property owners and competitive compared to other countries in the region. This approach contributes to the attractiveness of the Taiwanese real estate market for local and international investors.

Property tax in Taiwan is calculated based on the cadastral value of the land, which is generally lower than the market value. The tax rate varies depending on land use (residential, commercial, industrial) and location. For residential land, the rate is typically between 0.2% and 1% of the cadastral value, which remains relatively moderate compared to other developed countries.

The housing tax, on the other hand, applies to buildings and is calculated based on the estimated construction value. The rate generally varies between 1.2% and 3.6% of this value, with lower rates for owner-occupied residential properties. This structure encourages homeownership while remaining attractive for rental investors.

An interesting aspect of the Taiwanese system is the possibility of benefiting from tax reductions for certain property categories. For example, older properties or those located in priority development zones may qualify for reduced rates, which can represent an opportunity for investors seeking properties with high appreciation potential.

Additionally, Taiwan has implemented a system of regular reassessment of cadastral values to ensure that the tax base remains aligned with real estate market developments. This approach, while potentially leading to gradual tax increases, guarantees a certain predictability and fairness in the tax system.

It is also important to note that local Taiwanese authorities have some latitude to adjust tax rates within limits set by national law. This flexibility allows different regions of Taiwan to adapt their tax policies according to their economic and urban development objectives, thus creating varied opportunities for real estate investors.

Taiwan vs Other Destinations: An Advantageous Tax Comparison

To better appreciate Taiwan’s tax attractiveness for real estate investors, it is useful to compare its tax regime with other popular real estate investment destinations in Asia and worldwide.

Comparison with Hong Kong: Although Hong Kong is often considered a tax haven, Taiwan offers certain comparative advantages. Hong Kong applies a flat tax rate of 15% on rental income, which may seem attractive at first glance. However, Taiwan allows more generous deductions, which can significantly reduce the taxable base. Moreover, property taxes in Hong Kong are generally higher than in Taiwan, particularly for luxury properties.

Comparison with Singapore: Singapore taxes rental income at the progressive income tax rate, which can reach 22% for the highest brackets. Although this rate is lower than Taiwan’s maximum rate (40%), the deductions allowed in Singapore are less generous. Additionally, Singapore applies a tax on foreign buyers of real estate, which does not exist in Taiwan.

Comparison with Japan: Japan taxes rental income at a progressive rate that can reach 55% for the highest brackets. Although Japan also offers interesting deductions, the overall tax rate generally remains higher than in Taiwan. Moreover, Japan applies a wealth tax for significant assets, which does not exist in Taiwan.

Comparison with Australia: Australia taxes rental income at the marginal income tax rate, which can reach 45%. Although Australia offers generous deductions, particularly for property depreciation, the overall tax regime remains less advantageous than Taiwan’s. Additionally, Australia applies restrictions and additional taxes for foreign buyers in some states.

Comparison with the United States: In the United States, rental income is taxed at the federal rate (up to 37%) plus state and local taxes. Although the United States offers interesting deductions, particularly for depreciation, the overall tax regime can be more complex and potentially heavier than in Taiwan, especially for foreign investors.

This comparison highlights several tax advantages of Taiwan:

• A generous deduction system that can significantly reduce the taxable base
• Absence of specific taxes for foreign buyers
• A moderate and flexible property and housing tax system
• Absence of wealth tax
• An extensive network of double taxation avoidance agreements

Conclusion: Taiwan, a Tax-Attractive Destination for Real Estate Investment

The detailed analysis of Taiwan’s tax regime for real estate investment reveals an environment particularly favorable to local and international investors. The tax advantages offered by Taiwan, combined with a dynamic real estate market and a stable economy, make it a preferred destination for diversifying an international real estate portfolio.

The strengths of the Taiwanese tax system include:

• Competitive tax rates on rental income
• A generous deduction system allowing significant reduction of the taxable base
• Specific tax incentives for certain types of real estate investments
• An extensive network of double taxation avoidance agreements facilitating international investment
• A balanced and flexible property and housing tax system
• Absence of wealth tax and specific taxes for foreign buyers

These tax advantages, combined with Taiwan’s political and economic stability, as well as its growing real estate market, offer attractive opportunities for investors seeking interesting returns and favorable tax treatment.

However, it is important to note that the tax landscape can evolve and each investment situation is unique. Therefore, potential investors are recommended to consult tax and legal experts familiar with the Taiwanese market before making investment decisions.

Ultimately, Taiwan positions itself as a tax-attractive destination for real estate investment, offering an interesting balance between return opportunities and tax advantages, while maintaining a transparent and stable investment environment.