Newsletter
Amendments to the "Real Estate Actual Purchase Price Registration System" Took Effect on July 1, 2020
Taiwan launched the "Real Estate Actual Purchase Price Registration System" on August 1, 2012 to promote the transparency of real estate transactions. Under such system, the land administration agent (i.e., scrivener), real estate broker or obligee (i.e., buyer) involved in a real estate sale transaction must register the actual purchase price thereof with the competent authority within 30 days after the closing of the transaction.
To further ensure the real-time accuracy of the real estate transaction information, certain provisions on the registration of the actual purchase price of a real estate transaction under the Equalization of Land Rights Act (i.e., Articles 47 and 81-2) were amended on July 31, 2019. With the approval of the Executive Yuan, such amendments (hereinafter, the "New System") took effect on July 1, 2020. A summary of the New System is as follows:
1. Obligation to Register: Since the seller and the buyer in a real estate transaction are the actual parties that negotiated and executed the transaction documents, they should be more familiar with the details and terms of the transaction. Hence, under the New System, the obligee (i.e., the buyer) and the obligor (i.e., the seller) of the real estate transaction are required to jointly register the actual purchase price so as to improve the accuracy of the information through the parties' cross verification.
Therefore, under the New System, land administration agents (i.e., scriveners) and real estate brokers are no longer obligated to register the actual purchase prices of real estate sale and purchase transactions.
2. Timing of Registration: To ensure the real-time disclosure of the information on real estate transactions, the New System requires that the price registration be made at the same time as the application for the registration of the title transfer.
3. Penalty: The New System imposes varying degrees of penalties on different types of violations of the registration obligation. As the main purpose of the New System is the disclosure of price information, any registration of false or untrue price information would have the most impact in terms of the timeliness and accuracy of the registered information and the core purpose of the New System. Hence, such violation will immediately incur an administrative fine (NT$30,000 to NT$150,000) without any grace period for rectification, and the competent authority will also require the violator to rectify the violation within a specified period of time. For the registration of any false or untrue information other than the purchase price, the violator will be ordered to rectify within a specified period of time; the fine for failing to rectify such violation has been lowered under the New System (NT$6,000 to NT$30,000).
4. Registration of Transaction Information: The Guidelines on the Registration of Real Estate Transaction Information and the Inquiry Charges on the Registered Information have also been amended accordingly.
(1) As it is a common practice for a seller and a buyer to agree on a total purchase price that covers both the land and building in a transaction, the New System no longer requires the separate registration of land price and building price; instead, the total purchase price for the land, building and parking spaces, as specified under the sale and purchase agreement for the transaction, should be registered under the New System. Also, as the price of parking spaces is usually separately calculated based on the number of spaces instead of the floor area thereof, the New System also requires the separate registration of the total price of the parking spaces if they are separately calculated.
(2) As for the other information required to be registered, in addition to the originally required information on the floor area of the land and building, the zoning of the real property, and the current state and layout of the building (e.g., "balcony internalization/ extrapolation", rooftop additions, and mezzanine), the New System also requires the registration of the transaction date (i.e., the date on which the seller and the buyer executed the sale and purchase agreement, not the standard contract based on the government designated form and substance), whether there is a management committee, whether there is an elevator, the type of parking space(s), the floor area of the parking space(s), and the level on which the parking space(s) is(are) located. Where the transaction is conducted under special circumstances (e.g., expedited/urgent transaction), such circumstances should also be specified on the registration form as they could affect the purchase price of the transaction.
As the seller and buyer in a real estate transaction may commit a criminal offense under Article 214 of the Criminal Code (i.e., [causing] a public official to make in a public document an entry which such a person knows to be false) for their registration of any false or untrue information to the New System, the seller and buyer should ensure the accuracy of the transaction information being registered so as to ensure the accuracy of their registered information.