Answer:
In a house transaction, besides the payment for the house, it is better to prepare additional 150 thousand dollars in order to pay for some taxation and other cost. The following explains the taxation required in a real estate transaction.
(1) Share of the taxation (cost) during house transition and transference
Buyer
Seller
1. The agency service charge for both the seller and buyer shall not exceed 6% of the total final selling price.
2. The agency service charge for both the leaser and lessee shall not exceed 1.5 months’ rent.
2. Contract signing fee ($1000) 2. Contract signing fee ($1000)
3. Deed tax (6% of the present house value) 3. Value-Added Tax (Self use or general)
4. Registration fee
( total present value of building + reported total present value of land)×1% 4. Write-off fee (for those with mortgage)
5. Stamp tax (total present value of building + reported total present value of land )×1%
6. Land administrator fee (transaction) $10000 ～ (transaction + mortgage) $14000
7. Mortgage registration fee (total set price for bank mortgage)×1%
8. Fire insurance premium (in accordance to bank regulations)
The rate charging criteria for land administration are based on each piece of land or each building of land. For each additional piece or building, another 25% is charged.
(2) Share of site taxation (cost) upon house handover
House tax, land value tax, custodian fee, water, electricity, and gas are basically charged by the principle of “user-pays” and baseline date is the date of house is handed over. Before the handover, the cost is afforded by the seller. After that, it is to be paid by the buyer. Payment is maid by the number of days till the date of the house handover or both parties can agree to calculate otherwise.
Water, electricity and gas is calculated by each period; that is, two months or 60 days, and calculated therewith.
Custodian fee is calculated in accordance to the regulations established by each management committee (one period is one month; that is, 30 days and calculated therewith.)
House tax is charged between July 1st of each year to June 30th of the following year as one year or one period, which is 365 days and calculated therewith.
Land value tax is charged between January 1st of each year to December 31st of the following year as one year or one period, which is 365 days and calculated therewith.
(3) Tax reporting and deductibles after transaction is complete.
After transference of the house is complete, you many ask a land administrator to help you apply for self use land value tax, which will save you tax money by four folds each year. When you are reporting income tax the following year after the transaction is complete, do not forget to report the income tax on property transaction, which can be calculated by general equations or simple formulas.
General formula: (best for houses sold lower than their original buying prices with supporting documents such as the deed at time of sale and purchase.）
（total selling price for the house－total purchasing price for the house） × 〔rated present value at time of sale ÷ （announced land present value＋rated present value for the house）〕
Simple formula: Rated present value at time of sale (approved deed priced at time of sale) × approved tax rate for the year
Finally, please also remember your rights as a seller or buyer, that is, re-purchase tax deductions. If you intend to change to a new house, you have to plan in advance, prepare and keep data for each transaction in order not to miss the opportunity.
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