Parents in Taiwan often ask whether transferring a home to a child now is cheaper than leaving it as inheritance. The tax at the moment of the gift is often not the problem. The real cost arrives when the child sells: for consolidated housing and land income tax (房地合一稅), the child’s cost basis is the assessed house value plus the announced land value at the time of the gift, not what the parents paid, so the taxable gain is inflated. This guide shows a real case, compares three routes, and explains what can still be done after a gift. Amounts are examples; each case is decided by the National Taxation Bureau. Based on the Ministry of Finance’s 2026 amounts and Articles 14-4 and 4-5 of the Income Tax Act, updated 20 September 2026.
Sold for less than the father paid, and still taxed
A gifted home can be sold below the parent’s price and still attract income tax. This case comes from the Ministry of Finance, with names replaced. In 2013, Mr A bought a home for NT$12,000,000. In 2016 he gave it to his son, B. In 2024, B sold it for NT$11,000,000, NT$1,000,000 less than his father paid. The tax bureau set B’s cost at only NT$10,000,000 (assessed house value NT$880,000 plus announced land value NT$7,250,000 at the gift, adjusted by a consumer price index of 113%, plus the deed tax and land value increment tax paid on the gift). Taxable gain NT$500,000; tax at 20%, NT$100,000.
Our view: A gift is one act, but the tax lands in two stages. What you must calculate before signing is the second stage, when the child sells.
Why the gain is inflated
Article 14-4, Paragraph 1 of the Income Tax Act requires a recipient to use the assessed house value and announced land value at the time of the gift, adjusted by the consumer price index, as cost. Both are usually well below market. Two further rules make it worse. The holding period restarts on the gift date: Paragraph 4 allows only heirs and legatees to add the previous owner’s period, so a child who sells within 2 years pays 45%. And under Article 4-4, Paragraph 1, the recipient’s acquisition date is the gift date, so even a home the parent bought in 1991 falls under the new regime if gifted after 2016. See Old vs new capital gains regime.
Taxes at the gift, and taxes at the later sale
At the gift: gift tax, land value increment tax (土地增值稅), deed tax and registration fees. At the later sale: income tax plus the seller’s land value increment tax.
| When | Tax | Who pays | How it is calculated, and the deadline |
|---|---|---|---|
| At the gift | Gift tax | Parent | Valued at the assessed standard house price plus announced land value; exemption NT$2,440,000 per year; net amount up to NT$28,110,000 at 10%, above that 15–20% |
| At the gift | Land value increment tax | Child | On a gratuitous transfer the recipient pays; 20/30/40%; 10% owner-occupier rate if qualified |
| At the gift | Deed tax | Child | 6% of the contract value, filed within 30 days of the contract date |
| At the gift | Registration fee | Child | 0.1% of the declared land value or value of the right |
| Later sale | Housing and land income tax | Child | Cost = the two assessed values at the gift, CPI-adjusted; 45/35/20/15% by holding period |
| Later sale | Land value increment tax | Child | On a sale the owner pays; 20/30/40% |
For foreign nationals: the 10% owner-occupier land tax rate and the NT$4,000,000 exemption both rest on household registration (戶籍), which most foreign families do not have. Assume the general rates at both stages and ask us to check your case.
Gift, sale within the family, or inheritance later
The routes differ less in cost now than in the child’s future cost basis and whether the holding period carries over. Inheritance is best on both.
| Gift | Sale within the family | Inheritance later | |
|---|---|---|---|
| Main taxes now | Gift tax, land value increment tax, deed tax | Deed tax, land value increment tax | Estate tax (exemption NT$13,330,000) |
| Land value increment tax | Charged, paid by recipient | Charged, paid by seller | Exempt |
| Deed tax | 6% | 6% | Not charged |
| Child’s future cost basis | Assessed values at the gift | The sale price, with proof of payment | Assessed values at inheritance |
| Holding period | Restarts at the gift | Restarts at the transfer | Deceased’s period is added |
| Old or new regime | New if gifted after 2015 | New if transferred after 2015 | Old if the deceased acquired before end of 2015 |
| Most common trap | Low cost basis, holding period reset | Sales between relatives within two degrees are deemed gifts | Cannot be dealt with during the parent’s lifetime |
Under Article 5, Paragraph 6 of the Estate and Gift Tax Act, a sale between relatives within two degrees of kinship is taxed as a gift unless there is solid proof that the price was paid and not lent or guaranteed by the seller. Inheritance is favourable for tax but gives the parent no control during their lifetime; see Inheritance registration and Selling an inherited property.
Already gifted? Four ways to limit the damage
Use the NT$4,000,000 owner-occupier exemption. Under Article 4-5, Paragraph 1, Item 1, six continuous years of household registration and residence, no letting or business use in the prior 6 years, and no prior use of the relief in 6 years give a NT$4,000,000 exemption and 10% on the excess. See The NT$4 million self-use exemption.
Claim the repurchase refund. Under Article 14-8, buying another owner-occupied home within 2 years of the transfer registration earns a refund in proportion to repurchase price against sale price, buying first also allowed; conversion or resale within 5 years triggers clawback. See Repurchase tax refund.
Hold longer. 45% within 2 years, 35% for 2 to 5 years, 20% for 5 to 10 years, 15% beyond 10 years.
Switch future gifts to annual instalments. Each donor has a NT$2,440,000 annual exemption, so two parents giving separately have two. Gifts between spouses, and wedding gifts to a child of up to NT$1,000,000, are excluded. If you gift cash for the child to buy a home, keep proof of payment.
Our view: First establish whether the child can live there for 6 years, then consider a repurchase. Both reliefs need to be set up in advance; asking at signing is usually too late.
When a gift is the right choice
A gift is not always wrong. When the aim is to avoid a family dispute or make a parent’s wishes certain, or when the assessed values are low anyway, it can make sense. If the two assessed values fall within the exemption, almost no tax is due at the gift and the later inflated gain is limited. With many heirs, a lifetime gift of a specific home to a specific child is simpler than a later division; a will works too but is subject to forced shares. For elderly parents, the NT$13,330,000 estate tax exemption and the NT$2,440,000 annual exemption should be planned together early. If the child will live there long-term, income tax only arises on sale, and after 6 years of registration the NT$4,000,000 exemption is available; where a gift carries an obligation, the recipient’s burden can be deducted from the gift value. A child who will sell within a year or two of the gift is taking the costliest route.
FAQ
What taxes are due when a home is gifted to a child?
Gift tax, paid by the parent; land value increment tax and deed tax, paid by the child; and registration fees. The gift is valued at assessed house and land values, with a NT$2,440,000 exemption per donor per year in 2026.
Can the child use the parents’ purchase price as cost?
No. Article 14-4, Paragraph 1 of the Income Tax Act sets the cost at the assessed house and land values at the gift, CPI-adjusted. The deed tax and land value increment tax paid on the gift can be added.
Does a sale between parent and child avoid gift tax?
Not necessarily. Article 5, Paragraph 6 of the Estate and Gift Tax Act treats sales between relatives within two degrees as gifts unless there is solid proof of payment and the funds were not lent or guaranteed by the seller.
Gift now or inheritance later?
On sale tax alone, inheritance is usually better: exempt from land value increment tax and deed tax, and the deceased’s holding period is added. Family factors also matter; an accountant should assess the whole picture.
Conclusion
Before transferring a home to a child, ask three questions: will the child sell within a few years, can the child claim the owner-occupier relief then, and would inheritance later be simpler. This is general information, not tax advice; confirm cost basis and reliefs with an accountant, a land administration agent (代書), the licensed professional who handles title transfer, or the tax bureau. Contact us if you want to talk it through.