The Ministry of the Interior promulgated the Rules for Approving the Mortgage Creation or Transfer of Real Property Right in Rem Acquired by Mainland China Citizens in the Taiwan Area (hereinafter, the “Rules”) as amended via the Tai-Nei-Di-1061304150 Directive of June 9, 2017. Consisting of 21 articles, the Rules came into effect on the day of their promulgation. The highlight of this amendment lies in the restriction that each mainland China investor can only acquire one piece of residential real property for self-use.
Article 7 of the Rules as amended specifically provides that each mainland China investors can only acquire one piece of residential real estate for residential use with registered property ownership or superficies right, and such real estate shall not be leased or used for non-residential purposes.
To avoid the circumstance where effective administration cannot be conducted when an applicant delays and fails to present the approval document to the local registration agency for real estate registration, Article 14, Paragraph 3 of the Rules is added to specifically stipulate that the approval document shall be valid for one year. Meanwhile, to ensure the person who has been approved to obtain or creat the entitlementof the real property uses the property for purposes set forth in the original application, Paragraph 6 of the same article provides that the government of eachcounty (city) is required to conduct regular audit and submit the results to the Ministry of the Interior to ensure effective administration.
Under Article 17, Paragraph 1, Subparagraph 2, as added, of the Rules, if the use of a rights holder does not comply with the above Article 7, the Ministry of the interior shall revoke or cancel the approval and notify the local government in which the real estate was located to demand its transfer within one year.