The land value tax is one of the most important land taxes. It has the dual function of completing land policies and strengthening local finances. Its major contents are as follows:
The land value tax is imposed on land that has been assigned a value. Land that has been assigned a value, and which is also being used as farm land, shall be taxed as agricultural land and no land value tax shall be levied on it in accordance with relevant laws.
For the following situations, the tax authority may designate land users to be responsible for paying the land value tax:
There are two kinds of rates for land value tax; the regular progressive tax rate and the special privileged rate:
Regular progressive tax rate
A progressive tax rate shall be used to calculate the tax payable on regular land; the basic tax rate is 1% with the highest tax rate at 5.5%. The tax structure in this category is as follows:
Class | Formulas for Calculation |
---|---|
First Class |
Tax payable=Taxable Land Value (Not exceeding SCV)X Rate(1%) |
Second Class |
Tax payable=Taxable Land Value (Portion exceeding SCV is Less than 500% of SCV ) X Rate (1.5%)--Cumulative Difference (SCV X 0.005) |
Third Class |
Tax payable =Taxable Land Value (portion exceeding SCV is less than 1000% of SCV) X Rate(3.5%)--Cumulative Difference (SCV X 0.065) |
Fourth Class |
Tax payable = Taxable Land Value (Portion exceeding SCV is More 1500% of SCV) X Rate(3.5%)--Cumulative Difference (SCV X 0.175) |
Fifth Class |
Tax payable = Taxable Land Value (Portion exceeding SCV is More 2000% of SCV) X Rate(4.5%)--Cumulative Difference (SCV X 0.335) |
Sixth Class |
Tax payable = Taxable Land Value (Portion exceeding SCV is More 2000% of SCV) X Rate(5.5%)--Cumulative Difference (SCV X 0.545) |
Special privileged rate
Calculation of Land Value and Consolidated Total of land Value
Special Levy of Vacant Lot Tax
In order to enhance the effective use of land and to expedite urban development, vacant lot tax shall be levied on a lot where supportive systems such as roads, sewage systems, electricity and water supply systems have been completed, but the lot construction has not been carried out. In cases where the construction has been completed, but the said construction improvement is valued at less than 10% of the Declared Land Value of the land base for the construction, and determined by the municipal or county (city) government as requiring further development or alteration of the existing construction or reconstruction, the said lot, if still vacant, shall be subjected to an additional levy of vacant lot tax ("VLT") to be assessed by the municipal or county (city) government. The VLT shall equal 2 to 5 times the basic land tax payable for such a lot according to the regular land value tax calculation.
Reductions and Exemptions
Public land
For publicly owned land used for public purposes, the land value tax is fully exempted. The following categories of land shall be included:
Private land
Private land in fulfillment of the following deduction schedule may have its land value tax deducted or exempted according to law.
Passways under balconies and hallways
Passways or hallways for public passage with no construction improvement shall be exempted from land value tax; those with construction improvements are subject to the deduction schedule provided below (Article 10 of the Regulations for the Deductions and Exemptions of the Land Tax Law).