Land administration agent offices often handle land and house sale transactions, including transactions between relatives. In this article, LY Land Administration Agent Office explains the real estate sale and purchase process in Taiwan in a clear and practical way.
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| Table of Contents |
1. Process Overview
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Depending on the circumstances of each case, a real estate transaction usually takes about 2 to 6 weeks from contract signing to handover, or up to around one and a half months. The actual timeline may vary depending on the complexity of the case.
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The following explains the four major stages of a real estate transaction: contract signing, seal affixing, tax payment, ownership transfer registration, and handover, as well as the documents required from both the buyer and the seller.
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Contract Signing: Signing the Real Estate Sale and Purchase Agreement, Also Known as a Private Contract
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Overview:The buyer and seller reach an agreement on the purchase price, payment method, timing and amount of the four-stage payments, handover date, default provisions, warranties, and other transaction terms. These terms are recorded in the contract, signed by both parties, and may be witnessed by a land administration agent. In recent practice, “contract signing” and the next step, “seal affixing,” are usually handled at the same time.
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Process:
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Confirm the identities of both parties: Confirm whether the person signing the contract is the property owner. A land administration agent may assist with verification.
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Reach agreement on the contract terms: The buyer should carefully read the contract and verify the ownership certificate.
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Sign the contract: Both parties personally sign, and where applicable affix their seals to, the sale and purchase agreement, and also sign the escrow agreement.
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Pay the contract signing payment: The buyer pays the contract signing payment to the seller. The deposit may be credited against the corresponding portion of the contract signing payment. The seller may also require the buyer to issue a “promissory note securing the remaining balance” for the unpaid amount.¹
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¹ A “promissory note securing the remaining balance” means that the buyer issues a promissory note and places it in the custody of a neutral third party, such as a land administration agent. This is used to prevent a situation where the seller transfers the property to the buyer, but the buyer then instructs the bank not to release the remaining funds, causing the seller to lose both the property and the payment. Once the buyer has paid the remaining balance in full, the promissory note must be returned to the buyer at handover.
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Documents Required from Both Parties:
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Documents Required from Both Parties for Contract Signing
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Seller
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Buyer
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1
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Registered seal and Seal Registration Certificate
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Personal seal. A regular personal seal is sufficient.
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2
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The seller’s national ID card, or an authorization letter and the authorized agent’s national ID card
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National ID card
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3
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Land and building ownership certificates
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Seal Affixing
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Overview: Seal affixing means providing the registered seal and Seal Registration Certificate. Providing a Seal Registration Certificate indicates that the owner agrees to use the registered seal for the sale of the property. About 7 to 14 days after the contract is signed, the parties affix their seals to the official contract form.
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Process:
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Go to the land office: Apply for land and building registration transcripts, complete the land registration application form, and prepare the land value increment tax declaration form.
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Go to the tax office: Complete the land value increment tax declaration form and attach the required documents, including photocopies of both parties’ national ID cards, the land registration transcript, and the land ownership certificate.
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Go to the township, town, or city office: Apply for deed tax, complete the house deed tax declaration form, and attach the required documents, including a photocopy of the stamped ownership transfer contract and the building registration transcript.
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Go to the bank: If a mortgage is needed, the lending bank should be decided at the seal-affixing stage. This may be handled by a land administration agent. The seal-affixing stage usually takes about two to three weeks.
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Documents Required from Both Parties:
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Documents Required from Both Parties for Seal Affixing
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Seller
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Buyer
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1
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Photocopy of the land ownership certificate
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Official contract form
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2
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Land and building registration transcripts
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Personal seal. It does not necessarily have to be a registered seal.
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3
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Registered seal and Seal Registration Certificate
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Photocopy of national ID card
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4
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Photocopy of national ID card
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Tax Payment
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Overview: Tax payment is an important step before ownership transfer registration can be completed. The tax bills and mortgage loan amount must be confirmed, and both the buyer and seller must have no outstanding taxes before the ownership transfer can proceed.
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Process:
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Buyer: Pay deed tax.
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Seller: Pay land value increment tax, income from property transactions under the old system, or house and land transactions income tax under the new system.
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P.S. Real estate acquired on or before December 31, 2015 is subject to the old system.
Old system: Income from property transactions is reported together with individual income tax in the following year.
New system: House and land transactions income tax must be filed and paid within one month after ownership transfer registration.
Old system: Income from property transactions is reported together with individual income tax in the following year.
New system: House and land transactions income tax must be filed and paid within one month after ownership transfer registration.
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House tax and land value tax
Before ownership transfer: paid by the selle
After ownership transfer: paid by the buyer.
After ownership transfer: paid by the buyer.
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Documents Required from Both Parties:
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Documents and Payments Required from Both Parties for Tax Payment
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Seller
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Buyer
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1
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Land value increment tax payment
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Deed tax on the house, approximately 6% of the assessed present value of the house
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2
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Income from property transactions under the old system, or house and land transactions income tax under the new system
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Tax payment-stage installment, usually 10% of the purchase price
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3
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Any other outstanding taxes
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Ownership Transfer Registration and Handover
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Overview: Ownership transfer registration is the final procedure before handover. However, at this stage, the seller often still has an outstanding mortgage. The buyer’s lending bank may carry out a mortgage payoff procedure by repaying the seller’s outstanding mortgage balance and obtaining a payoff certificate issued by the seller’s lending bank. The land administration agent then proceeds with the remaining procedures.
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Process:
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Go to the land office to complete the land registration application form and submit the required supporting documents.
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The buyer pays the registration fees.
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The new ownership certificate is collected.
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The remaining balance is paid.
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The property is inspected and handed over.
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Documents Required from Both Parties:
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Documents Required from Both Parties for Ownership Transfer and Handover
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Seller
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Buyer
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Land value increment tax bill
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Household registration transcript
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2
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Land and building ownership certificates
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Photocopy of household certificate
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3
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Registered seal and Seal Registration Certificate
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Personal seal
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4
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Photocopy of national ID card
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Deed tax bill
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5
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Photocopy of national ID card
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6
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Original and duplicate copies of the land and building sale ownership transfer contrac
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7
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Registration fees
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8
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Land administration agent fees
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2. Payment Timing and Amounts in a Real Estate Transaction
During a real estate transaction, the buyer usually pays the seller in three main stages:
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Contract signing and seal-affixing payment: For example, if the buyer obtains an 80% mortgage from the bank, with a total purchase price of NT$10 million and a bank loan of NT$8 million, the contract signing and seal-affixing payment is usually 10% of the total purchase price, or NT$1 million.
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Tax payment-stage installment: In the same example, the tax payment-stage installment is usually 10% of the total purchase price.
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Handover payment: In the same example, the handover payment is 80% of the total purchase price. This is the remaining amount payable after deducting the contract signing and seal-affixing payment and the tax payment-stage installment.
3. The Role of a Land Administration Agent in a Real Estate Transaction
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Assisting in verifying the identities of the buyer and seller
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Witnessing the contract signing
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Handling seal affixing for the buyer and seller
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Paying government-required fees and deed tax on behalf of the buyer and seller
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Handling mortgage creation, mortgage payoff and cancellation, and ownership transfer registration
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Handing over transaction documents and the property between the buyer and seller
4. Conclusion
After reviewing the real estate sale and purchase process above, you can see that buying or selling real estate involves a series of complicated procedures. It usually takes around one and a half months to complete the entire process, which can be time-consuming and exhausting.
For office workers with regular nine-to-five schedules, it can be difficult to find time to handle all the procedures in person.If you need assistance, you may consider appointing a professional land administration agent to save valuable time and complete the sale and purchase procedures efficiently.
Further Reading: How to Transfer a House to Family Members in Taiwan with the Lowest Tax Burden
Further Reading: How to Transfer a House to Family Members in Taiwan with the Lowest Tax Burden
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