Individuals whose real estate is auctioned by the court must file consolidated housing and land tax within 30 days of the transfer certificate, even if no proceeds are received. A 20% rate applies to involuntary transfers held under five years.
Taiwan’s Southern District National Taxation Bureau of the Ministry of Finance has clarified that individuals whose real estate is auctioned by the court are required to report the transaction for consolidated housing and land tax, even if no proceeds are received.
This announcement was made on 26 February 2026.
The rules apply to properties acquired on or after 1 January 2016. Taxpayers must file the tax within 30 days from the day after the purchaser receives the certificate of transfer of rights issued by the court. For properties forcibly executed due to debt repayment failures, including tax arrears, and held for less than five years, the transaction is considered an involuntary transfer. The applicable tax rate in such cases is 20%.
The Bureau explained that court-enforced transfers constitute a compensated transfer of a sales nature. Taxable gain or loss should be calculated by subtracting the original acquisition cost and necessary expenses from the auction price, regardless of whether the taxpayer receives any proceeds.
The Bureau noted frequent non-compliance when auction proceeds are not received or when the transaction results in a loss. In such cases, tax authorities will assess and levy tax based on property transfer records and verified data, including penalties.
As an example, a recent case involved an individual who received a property by gift in 2021, mortgaged it, and defaulted. The property was auctioned, the proceeds went to creditors, and the individual failed to file the tax. The Bureau calculated the taxable amount using ownership transfer records, applied the 20% tax rate, and imposed a fine.
Taxpayers are reminded that auctioned real estate falling under the consolidated housing and land tax must be reported within 30 days of certificate issuance, even if auction proceeds are insufficient to cover debts. Queries regarding certificate issuance can be directed to the enforcement court.
