Imposition of stricter mortgage regulations planned to help improve and stabilise financial market
Taiwan’s central bank has reinforced the rules presided over mortgages supplemented by banks, in hopes to control property speculation made by the public, reported Taiwan News.
Yang Chin-long, the governor of Central bank, announced to reporters that the action taken in tightening home mortgage rules is to work towards improving and stabilising the health of the financial market.
The government is being censured by the younger generation, as domestic house prices have continuously increased, sparking uproar as such residents aren’t able to step into Taiwan’s property ladder.
Prior to this tightening, banks were allowed to extend as much as they wanted to residents pursuing home loans.
However, subject to the latest mortgage rules, the central bank has implemented a ceiling on mortgages for the first home, while enterprises and other legal entities will purchase at 60 percent of the home’s price.
As for the second home purchased by enterprises and other legal entities, the ceiling is now capped at 50 percent. For third individual home buyers, the mortgage cap is at 60 percent.
In terms of high-priced luxury homes, the most scrutinised property segment in Taiwan, the ceiling still remains at 60 percent of the home’s price, in spite of the new rules. As claimed by the central bank, high-priced luxury homes are those listed above TWD70 million (USD2.46 million).
In tackling property speculation, the Executive Yuan has also delivered a five-point plan, which includes schemes to restrict the flipping of pre-sold houses and eradicate property transactions performed under enterprises to reduce tax debt.
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