The supreme land policy in Taiwan, the Republic of China (R.O.C.) is Equalization of Land Rights advocated by Dr. Sun Yat-sen, the founder of the Republic. It is provided in the ROC Constitution that the land rights acquired by the landlords in accordance with the law and the interest resulted from individual investment of capital and labor shall be protected, and that the natural increment in value of land shall be enjoyed by the whole society. Four major measures including "Assessment of Land Value", "Taxation according to the Declared Land Value", "Government Purchase of Land at the Declared Land Value", and "Land Value Increment to the Public" are adopted through the gradual, peaceful, legal and rational means to implement the above land policy and achieve the goal of optimal land utilization.
According to the four measures, we can realize that the importance of "Public enjoyment of land benefits" is no less than "Optimal land utilization". Because the policy decision emphas the social meaning more than that of economics, so we choose the preventive land value strategy, it will be the best way to solve land problems.
B. Major Tasks and Acts
1. Equalization of Land Rights Act
R.O.C. land policy is based on the idea of "Equalization of Land Rights". It is clearly stated on the Article 143 of the ROC Constitution： The national economy shall be based on the principle of people's livelihood and shall seek to effect the equalization of land rights and regulation of private capital in order to assure equitable distribution of national wealth and sufficiency for the peoples livelihood.
(1) Principles of the Equalization of Land Rights
a. To protect the private and ownership acquired by landlords in accordance with law.
b. Land value increase resulted from the employment of labor and capital by the landlord shall be enjoyed by landlords himself.
c. The natural increase of land value as a result of increase of population, enhancement of social prosperity, progress of economy and advancement of politics shall be enjoyed by all the citizens in common.
(2) Approaches of the Equalization of Land Rights
"Assessment of Land value ", "Taxation according to the Declared Land Value"，" Government Purchase of Land at the Declared Land Value" and " Land Value Increment to the Public" are four approaches to implement the equalization of land rights ；each of them has its own purpose, yet they are interlinked.
a. Assessment of land value
It is an approach to distinguish between the public and private landownership. The assessed current value is the part that belongs to land owner, while the increased part which is not the result from the owner's investment or improvement should be considered as public property. The assessment of land value is the cornerstone for implementing the rest three steps.
b. Taxation according to the declared land value
This is a way for the government to impose tax on land according to the landowner's declaring value. It is not only an approach to realize the equal enjoyment of land value increment by the public as well as to serve as an auxiliary means to implement " assessment of land value" , but it also can force landlords to declare his land value honestly. Otherwise, the tax burden shall be heavier for him.
c. Government purchase of land at the declared land value
It is an approach for the government to adjust the distribution of land rights and promote the rational land utilization. The government, in view of preventing land speculation or irrational land utilization, can enforce the adjustment of land rights to meet the need of social economic development by purchasing the private land at declared value when necessary. Besides, since the government may purchase, at declared values, the lands whose values have been declared too low by the landowners, it forces land owners to declare land values more precisely and makes the taxation more fair.
d. Land value increment to the public
This step makes it possible for the government to extract the natural increment value in the future. The natural land value increment after the assessment of land value shall be enjoyed by all citizens in common by levying the land value increment tax. This is also an approach to control the assessment of land value, since this will make landowners declare land value more correctly on account of the fact that more increment value tax will be levied in the future because of the lower current declared value. Four approaches: assessment of land value, taxation according to the declared land values, government purchase of land at the declared land value, and public enjoyment of land value increment-were implemented to decentralize the land rights, to check the land speculation, to increase the welfare to the society.
2. The Real Estate Appraiser Act
The Real Estate Appraiser Act was enacted in October of 2000. Its by-regulations were enacted in 2001. The creation of an appraiser license system is critical to developing sound transactions in the ROC real estate market. Therefore, the MOI collect information on appraiser systems being used in foreign countries and also refer patterns of the domestic economic activities and business conditions. These data are beneficial to draft the local real estate appraisal technique and to build up the management of professional real estate appraiser and an advice-providing system. In order to developing healthy real estate appraisal system in the domestic real estate transaction market, the MOI draw up the bylaws of the Real Estate Appraiser Act. The key points of The Real estate appraiser Act are as follows:
(1) According to the Article 1 and 42, the citizen of ROC or foreigner who wants to be real estate appraiser should pass the national real estate appraiser examination.
(2) Article 14 The business scope of real estate appraiser includes land, building, crop and right based upon previous items.
(3) Article 20 The certificate of real estate appraiser need be changed every 4 years. Real estate appraisers must accept 36 hours specialized courses to keep their qualification. There are already 101 certificated real estate appraisers now.
C. Major Business Scope: Land Valuation and Land Taxation
Land value is the basis for land tax. Local governments take charge evaluating land values. The MOI is responsible for reviewing the rationality of land values evaluated by local government. Major tasks of the MOI are as follows:
1. Improve the appraisal technique
To make the land value for public use more accurate and authentic, the MOI is amending the regulation for land value assessment. The MOI is also studying the feasibility of the computer assist mass assessment.
2. Supervising the announcement of current land value by local government
The current land values which are announced once every year are the basis for levying land value increment tax. The MOI supervises local government to make the announced current land value react the market value. The Ministry of Finance hopes the announced current land value could be raised to enhance land tax revenue. But local governments always underestimate the current land value concerning alleviating the tax burden of taxpayers.
3. Compilation of Urban Land Price Indices
To provide the general public with correct information concerning urban land prices, the ministry of Interion(MOI) attempted to compile urban land price indices in 1989. After an assessment in 1990, the MOI then drew up its “Urban Land Price Index Compilation Program” and “Guidelines for Investigation and Compilation of Urban Land Price Indices” as a base for such investigation and compilation. For urban lands within Taipei and Kaohsiung Cities and for those cities within counties in Taiwan Province, and of Kinmen and Lienchiang Counties in Fuchien Province, the price indices are derived from land prices weighted by area in a given zone. These price indicators are compiled twice a year and published on January 15 and July 15, respectively.
4. Publishing of Real Estate Transaction Information
Due to a severe lack of public real estate transaction information, there currently exist various problems involving negotiations in this field. In order to resolve this situation, in 1985, the former Taiwan Provincial Government prescribed a “Plan for Establishing Land Values for Taiwan Province”. Execution of this plan started in 1991 and this action gradually involved three years of collecting land price information databases for commercial and residential areas within 108 major cities including Keelung.
We have been collecting land transaction prices within Taipei City, Kaohsiung City, Kinmen and Lienchiang Counties since the fourth quarter of 1999 and we have been publishing this data within our “Brief Informational Brochure Concerning Real Estate Transaction Prices of the Republic of China”. Meanwhile, we have also constructed a web site in order to provide fast and complete real estate transaction information. This information serves as an important reference for various government administrations, as well as for purchases, pledges and investments by the private sector.