Many families choose to pass houses or land on to the next generation. However, during the planning process, a small detail can significantly increase the tax burden. In Kaohsiung, a recent case involved a resident who gifted real estate to a child and voluntarily paid the land value increment tax and deed tax on the child's behalf, which resulted in an additional NT$129,000 in gift tax.

According to the Kaohsiung National Taxation Bureau under Taiwan's Ministry of Finance, regulations state that if the recipient of the property pays the taxes themselves, the land value increment tax and deed tax can be deducted from the total value of the gift, resulting in a lower gift tax. However, if the donor pays these taxes instead, the payment is considered an additional gift and must be included in the total gift value when calculating the tax, increasing the tax liability. In this case, the original gift tax was NT$527,000, but after the donor paid  NT$129,000 in taxes on behalf of the recipient, the final gift tax increased to NT$656,000.

The National Taxation Bureau reminds families that when planning property transfers, it is important to consider “who pays the tax” in order to avoid paying more gift tax than necessary. Taxpayers should also retain tax payment certificates and proof of transactions when filing to ensure the accuracy of tax reporting. If there are questions, the public can use the online “National Tax Helper” on the bureau's website or call the toll-free hotline 0800-000-321 for assistance.

This case highlights that gifting real estate is not simply about signing a contract. Proper tax planning is also essential to ensure that assets can be smoothly passed on to the next generation without creating additional financial burdens.