Taiwan pre-sale housing buyers face legal and market risks

Homebuyers in Taiwan are facing diverse challenges regarding pre-sale housing, ranging from construction accidents to market downturns. In the Ji Tai Da Zhi project, a 2023 construction accident caused neighboring houses to sink and collapse, leading to a total work stoppage. A buyer successfully sued the developer, winning a judgment that required the return of ten million TWD in down payments plus one million TWD in liquidated damages after proving the developer breached the contract.

In Kaohsiung's Nanzi district, specifically regarding the Nanzi Han project, market cooling has left buyers facing difficult decisions. One buyer, who purchased a unit two years ago during a period of high demand driven by TSMC's local presence, is considering forfeiting a one million TWD down payment to cancel the contract rather than paying an additional 14% to complete the handover. The buyer fears that if they complete the purchase, the property may be difficult to resell, leading to ongoing mortgage interest and holding costs.

Legal experts suggest that for stalled projects, buyers should utilize price trust mechanisms and notify trust banks to pause payments. For those facing market losses, the decision to cancel or complete the handover depends on current market prices and the potential impact of the Real Estate Combined Tax on short-term resales.