Tax Alert | CPI Adjustment Available for Sales of Inherited or Gifted Property Under Taiwan's Old Tax Regime
Tax Alert | CPI Adjustment Available for Sales of Inherited or Gifted Property Under Taiwan's Old Tax Regime
July 15, 2026
Tai-Tsai-Shui No. 11504549440
1. Where an individual sells a house acquired by inheritance or gift, and the actual transaction price of the house at the time of sale has been provided by the individual or has been obtained through investigation by the competent tax authority, the property transaction income shall be calculated in accordance with Subparagraph 2 of Category 7 of Paragraph 1 of Article 14 of the Income Tax Act. The amount of income shall be the balance remaining after deducting from the transaction price of the house at the time of sale: (i) the current value of the house at the time of inheritance or gift, as adjusted by the consumer price index announced by the government; and (ii) all expenses incurred for the acquisition, improvement, and transfer of the house.
2. Subparagraph 2 of Paragraph 2 of Point 2 of the Ministry's Order Tai-Tsai-Shui No. 10504632520, dated March 2, 2017, is amended as follows: "Where the property was originally acquired by the spouse through inheritance from or gift by a third party, the current value of the house at the time of inheritance, or at the time the spouse originally received the house by gift from a third party, as adjusted by the consumer price index announced by the government, may be deducted in accordance with Subparagraph 2 of Category 7 of Paragraph 1 of Article 14 of the Income Tax Act."
3. For the purposes of the preceding two points, "adjusted by the consumer price index announced by the government" means that the current value of the house shall be adjusted by the ratio of the Taiwan Consumer Price Index for the month and year in which the transaction occurs to the Taiwan Consumer Price Index for the month and year of the applicable date specified below:
(1) For the circumstances described in Point 1, the applicable date shall be the date on which the individual acquired the house by inheritance or gift.
(2) For the circumstances described in the preceding point, the applicable date shall be the date on which the spouse originally acquired the house by inheritance from or gift by a third party.
4. The Ministry's Order Tai-Tsai-Shui No. 10200157200, dated November 14, 2013, is hereby repealed.
Overview
The Ministry of Finance explained that, under the current House and Land Income Tax regime, when an individual sells real property acquired through inheritance or gift, the current value of the house and the publicly announced land value at the time of inheritance or gift may be adjusted by the Consumer Price Index and deducted from the transaction price when calculating taxable gains. This mechanism is intended to mitigate the increase in nominal taxable income resulting from inflation.
Recognizing that the sale of houses subject to the old tax regime is affected by the same inflationary factors, the Ministry of Finance issued this interpretive ruling to promote a fairer calculation of taxable income. Accordingly, where an individual has provided, or the competent tax authority has obtained through investigation, the actual transaction price of a house acquired by inheritance or gift, the current value of the house at the time of inheritance or gift may be adjusted by the ratio of the Consumer Price Index for the month of sale to that for the month of inheritance or gift. The adjusted value may then be deducted from the transaction price, thereby reducing the impact of inflation on taxable property transaction income.
Our Comments
This interpretive ruling provides taxpayers with a more favorable method for calculating taxable gains from the sale of inherited or gifted houses. Individuals disposing of such properties should carefully determine whether they qualify for this preferential treatment to avoid paying more tax than is legally required.
For individuals holding real property acquired through inheritance or gift, we recommend consulting a qualified tax lawyer before proceeding with a sale or implementing any family wealth planning strategy. Professional advice can help identify the applicable tax regime and the appropriate method for calculating taxable gains. More broadly, this interpretive ruling sends a positive signal for family wealth succession by helping reduce the impact of inflation on nominal gains and the resulting tax burden.
