Mistakes to Avoid When Buying Real Estate in Taiwan

Published on October 3, 2025 and written by Cyril Jarnias

Here is an article about common mistakes when purchasing real estate in Taiwan, with the requested sections:

Real estate in Taiwan is attracting more and more foreign investors, drawn by the island’s economic dynamism and growth prospects. However, buying property in this Asian country carries certain risks for the uninitiated. Here’s an overview of the most common mistakes to avoid for a successful real estate investment in Taiwan.

Not researching legal restrictions: the number one trap

One of the most common and potentially costly mistakes is not sufficiently researching the legal framework surrounding real estate purchases by foreigners in Taiwan. Unlike other Asian countries, Taiwan allows foreigners to buy real estate, but with certain important restrictions to be aware of.

The main limitation concerns the type of property: foreigners can only buy apartments or single-family homes, but not vacant land. Additionally, the purchase is subject to prior approval from the Taiwanese government.

Another major restriction concerns the use of the property: it must be intended for personal use (primary or secondary residence) and not for purely speculative purposes. Foreign investors must therefore be vigilant and thoroughly research these legal aspects before proceeding.

Finally, there are areas where purchase by foreigners is prohibited, particularly for national security reasons. It is therefore crucial to check the status of the target area before any purchase.

Ignoring these restrictions can lead to the outright cancellation of the transaction, or even legal proceedings. It is therefore highly recommended to consult a specialized lawyer to ensure your purchase project complies with Taiwanese legislation.

Underestimating the importance of location: a choice that can be costly

Another common mistake is not giving enough importance to the property’s location. In Taiwan, perhaps more than elsewhere, location is crucial and can have a considerable impact on the property’s value and future profitability.

Taipei, the capital, remains the most sought-after and expensive area. Prices have skyrocketed in recent years, making investment increasingly difficult for foreigners. However, other cities like Taichung, Tainan, or Kaohsiung offer interesting opportunities at more affordable prices.

Beyond the choice of city, the neighborhood is also decisive. Areas near subway stations or major transportation routes are generally more valued. Similarly, proximity to international schools can be a major asset for renting to expatriates.

Also be aware of seismic or flood risk areas. Taiwan being located on a subduction zone, some regions are more exposed to earthquakes. Similarly, coastal areas may be prone to flooding during typhoons. These factors must be considered when choosing the location.

Not sufficiently studying the location can lead to a poor assessment of the property’s real value and its long-term appreciation potential. It is therefore essential to thoroughly research different neighborhoods, their evolution, and their prospects before making your choice.

Neglecting the property’s condition: beware of bad surprises

A classic mistake, but one that can have serious consequences, is not sufficiently checking the property’s condition before purchase. In Taiwan, many buildings are old and may require significant renovation or upgrading work.

Frequent earthquakes may have weakened the structure of some buildings. It is therefore crucial to have a thorough inspection carried out by a qualified professional before any purchase. This inspection should particularly focus on the structure’s solidity, the condition of electrical and plumbing installations, and the possible presence of asbestos or other hazardous materials.

Also pay attention to the building’s age. In Taiwan, buildings over 30 years old are considered old and can be difficult to resell. Moreover, they often require significant work to bring them up to current standards, particularly in terms of insulation and energy efficiency.

Finally, be vigilant about modifications made to the property by previous owners. Unauthorized extensions or modifications are common in Taiwan and can cause problems during resale or in case of inspections by authorities.

Neglecting these aspects can lead to bad surprises after purchase and unexpected costs that can burden the investment’s profitability. It is therefore essential to properly assess the property’s condition and anticipate any necessary work before committing.

Underestimating additional costs: watch your budget

A common mistake among foreign investors is not taking into account all costs associated with real estate purchase in Taiwan. Beyond the purchase price, several fees add up and can significantly increase the bill.

Notary and registration fees are relatively high in Taiwan. They can represent up to 7-8% of the purchase price. To this add real estate agency fees, typically around 4% of the sale price, shared between buyer and seller.

Property tax must also be considered. Its rate varies by municipality but can reach 2% of the property’s estimated value per year. Additionally, a capital gains tax on real estate applies upon resale, which can go up to 45% of the realized gain.

For foreign investors, costs related to remote property management must also be planned. If you don’t live on site, you’ll likely need to hire a rental management agency, representing an additional cost to include in your calculations.

Finally, don’t forget maintenance and homeowners association fees, which can be significant, especially in luxury buildings with many services.

Not accounting for all these costs can lead to a significant underestimation of the overall budget and affect the investment’s profitability. It is therefore crucial to anticipate them properly and integrate them into your financing plan.

Ignoring cultural specifics: a faux pas to avoid

A mistake often made by foreign investors is not sufficiently taking into account Taiwanese cultural specifics in their real estate project. These cultural aspects can have a significant impact on a property’s value and attractiveness.

Feng shui plays an important role in Taiwanese real estate. Many local buyers pay close attention to the property’s orientation, room layout, or the presence of elements considered harmful (like a direct view of a cemetery). Ignoring these aspects can make a property difficult to resell or rent on the local market.

Floor numbering is also an element to consider. The number 4 is considered unlucky because its pronunciation is close to the word “death” in Chinese. Thus, apartments on the 4th floor or containing the number 4 are often less valued.

Superstitions related to the property’s history can also influence its value. An apartment where a death occurred may be considered “haunted” and therefore difficult to sell or rent.

Finally, local living habits must be considered in the property’s layout. For example, the kitchen is often an important space for Taiwanese families, and an open kitchen may be less appreciated than in the West.

Ignoring these cultural aspects can lead to purchasing a property that’s difficult to resell or rent on the local market, despite its intrinsic qualities. It is therefore important to research these specifics and take them into account in your choice.

Neglecting tax aspects: beware of bad surprises

A common mistake among foreign investors is not sufficiently researching tax aspects related to purchasing and holding real estate in Taiwan. Taiwanese real estate taxation has several particularities that are essential to know to avoid bad surprises.

Capital gains tax on real estate is particularly high in Taiwan. It can reach up to 45% of the realized gain for properties held less than 2 years. This rate gradually decreases with the holding period but remains significant even after several years.

Rental income is also heavily taxed. It is subject to income tax, whose marginal rate can reach 40% for high incomes. Additionally, a 5% tax applies to gross rents.

Property tax, although relatively moderate (between 1% and 2% of the property’s estimated value), applies every year. Its amount can increase significantly if the property’s value appreciates.

Finally, be attentive to tax treaties between Taiwan and your home country. Since Taiwan has no official diplomatic recognition, tax treaties are rare, which can lead to double taxation situations.

Not taking these tax aspects into account can lead to a significant overestimation of the investment’s profitability. It is therefore crucial to thoroughly research applicable taxation and integrate these elements into your profitability calculations.

Rushing the purchase: patience is key

A common mistake, especially for foreign investors eager to finalize their project, is rushing into a purchase without taking the necessary time to properly understand the local market and its specifics.

The Taiwanese real estate market can be opaque for foreigners. Listed prices don’t always reflect transaction realities and negotiation is common. Taking time to observe the market, visit numerous properties, and compare prices is essential for making a good choice.

Market seasonality should also be considered. Periods around Chinese New Year (usually in February) are often quieter, with fewer transactions. Conversely, the back-to-school period in September can be more active.

It’s also important to properly understand long-term market trends. Some neighborhoods may experience strong appreciation due to infrastructure or urban development projects. Taking time to research these projects can lead to a wiser investment.

Finally, patience is necessary to find the right intermediary. Working with a reliable and experienced real estate agent, who speaks English and knows the market specifics for foreigners well, can make all the difference.

Rushing into a purchase can lead to overpaying, choosing a poorly located property, or missing interesting opportunities. It is therefore essential to take the necessary time to properly understand the market and make an informed choice.

In conclusion, investing in real estate in Taiwan can be an interesting opportunity, but carries specific risks that are crucial to understand well. By avoiding these common mistakes and taking time to thoroughly research, foreign investors can succeed in their real estate project in this dynamic and promising country.