Taiwan's National Taxation Bureau of the Central Area has advised heirs to declare the actual outstanding amount of a claim secured by a mortgage, rather than the maximum figure shown in land registration records, when filing an estate tax return.
Taiwan’s National Taxation Bureau of the Central Area, under the Ministry of Finance, has stated that where a decedent left a claim secured by a mortgage, the heirs should include the actual outstanding amount of that claim in the estate tax return, according to a release dated 30 September 2026.
The Bureau explained that a mortgage is a security interest over immovable property, provided by a debtor or a third party without transferring possession. If the secured claim is not repaid, the mortgagee may be satisfied from the proceeds of the sale of the mortgaged property. A mortgage is therefore a right in rem rather than a claim, and exists to secure a claim.
Accordingly, when calculating the value of an estate, Article 27 of the Enforcement Rules of the Estate and Gift Tax Act provides that the estate should be reported based on the amount of the claim. If interest has been agreed upon for the claim, the interest accrued up to the date of the decedent’s death should also be included.
Regardless of whether the right established by the decedent during their lifetime was an ordinary mortgage or a maximum amount mortgage, heirs should determine the amount to be reported based on the actual repayment received during the decedent’s lifetime. They should not simply report the “total amount of secured claims” stated in the mortgage registration section of the land registration transcript. Instead, the estate tax return should be based on the actual amount of the claim left by the decedent.
The Bureau also reminded taxpayers of a specific situation. If a mortgagee dies after the principal claim has been extinguished through repayment, but before the mortgage cancellation registration has been completed, the heirs should submit documentation proving repayment when filing the estate tax return. They should claim that the amount of the inherited claim was zero.
According to the Bureau, this can help avoid disputes between taxpayers and the tax authority at a later stage.
This announcement was made on 30 September 2026.
