Laws and Regulations Database of the Central Bank of the Republic of China(Taiwan)

1. The Regulations are promulgated pursuant to Articles 28, 29 and 31 of The Central Bank of the Republic of China (Taiwan) Act, and Paragraph 2 of Article 37, and Article 40 of The Banking Act of the Republic of China.

2. The terms used in the Regulations shall be defined as follows:

(1) “Financial institutions” shall include domestic banks, branches of foreign banks in Taiwan, credit cooperatives, Agricultural Bank of Taiwan, credit departments of farmers’ associations, credit departments of fishermen’s associations, Chunghwa Post Co., Ltd., and insurance companies.

(2) “Mortgage loans” shall include housing loans, land loans and unsold housing unit loans.

(3) “Housing loans” shall include high-priced housing loans and home loans.

(4) “High-priced housing loans” shall mean mortgage loans extended by financial institutions to borrowers for purchasing houses (including the allotted land) of any of the following types where the building ownership certificates thereof contains the word zhu (住, “residential”):

a. Located in Taipei City with an appraised value or purchase price of NT$70 million or more;

b. Located in New Taipei City with an appraised value or purchase price of NT$60 million or more; or

c. Located in a domestic area other than Taipei City and New Taipei City with an appraised value or purchase price of NT$40 million or more.

(5)“Home loans” shall mean mortgage loans extended by financial institutions to borrowers for purchasing non-high-priced houses (including the allotted land) where the building ownership certificates thereof contain word zhu (住, “residential”).

(6)“Land loans” shall mean mortgage loans extended by financial institutions to borrowers for purchasing land lots in a residential or commercial district demarcated in urban plans.

(7)“Unsold housing unit loans” shall mean mortgage loans extended by financial institutions to developers and secured by newly built unsold housing units (land allotments included).

(8) Developers” shall mean entities engaging in real estate development activities, namely the investment and construction of real estate including land, buildings,and other structures, for sale purposes; or entities engaging in the construction of residential buildings in the building construction industry.

(9)“Newly built unsold housing units (land allotments included)” shall mean houses (including the allotted land) built less than five years ago and maintaining the first registration of building ownership.

(10)“Borrower” shall mean a natural person or a corporation.

3. When a financial institution processes the application of a corporation for a housing loan, it shall enquire the Joint Credit Information Center (JCIC) about the applicant’s housing loan records. A housing loan of which the applying corporation has no secured loans backed by a house (including the allotted land) as collateral and of which the purpose is classified as “1” (for real estate purchases) shall be subject to the following restrictions:

(1) No grace period;

(2) The maximum loan amount may not exceed 60 percent of the appraised value or purchase price of the house (including the allotted land), whichever is lower; and

(3) The loan amount in the preceding Subparagraph may not be increased by reason of home renovation, working funds, or other purposes.

For a corporation that has more than one housing loan, Subparagraphs 1 and 3 of the preceding Paragraph shall apply, and the maximum loan amount may not exceed 50 percent of the appraised value or purchase price of the house (including the allotted land), whichever is lower.

4. Housing loans extended by a financial institution to natural persons shall be subject to the following restrictions:

(1) High-priced housing loans: The provisions of Paragraph 1 of the preceding Article shall apply.

(2) Home loans: The financial institution shall enquire the JCIC about the applicant’s housing loan records. In extending a home loan to an applying natural person who has more than two housing loans, Paragraph 1 of the preceding Article shall apply.

5. Land loans extended by a financial institution shall be subject to the following restrictions:

(1) The borrower shall submit a substantive development plan for the land purchased.

(2) The maximum loan amount may not exceed 65 percent of the acquisition cost or appraised value of the land, whichever is lower. 10 percent of the loan may not be disbursed until construction begins.

(3) The loan amount in the preceding Subparagraph may not be increased by reason of working funds or other purposes.

6. The maximum amount of an unsold housing unit loan extended by a financial institution may not exceed 50 percent of the appraised value of the housing unit.

7. These Regulations do not apply to mortgage loans extended by financial institutions for reconstruction projects developed pursuant to the Urban Renewal Act, the Statute for Expediting Reconstruction of Urban Unsafe and Old Buildings, or in accordance with government policies.

8. A financial institution shall conduct the appraisal for mortgage loans in accordance with its internal lending rules and provisions set forth by the competent authority.

When a financial institution processes an application for the transfer or term extension of a loan stated in the preceding Paragraph, the loan amount may not be increased through reappraisal.

9. For mortgage loans that have been approved but not yet disbursed on or before December 7, 2020, the original terms and conditions of the loans shall apply, provided they comply with the provisions prevailing at the time of approval.

10. A financial institution shall file reports on its mortgage loans periodically in the format set up by the Central Bank of the Republic of China (Taiwan).

A financial institution shall set up internal risk controls, operating procedures,and other necessary internal rules for conducting mortgage loan businesses. If the lending criteria under the financial institution’s internal rules are stricter than the Regulations, the internal rules shall prevail.