The biggest worry for a first-time buyer is usually not the money but not knowing what happens next. This guide breaks a resale purchase in Taichung into five stages, with the cost, timing and pitfalls of each.
The big picture: about 6 to 8 weeks from offer to keys
The price is paid in four instalments that follow the process: earnest money (斡旋金, paid with your offer and later converted into a deposit), the signing payment, the sealing and tax payment, and the final balance at handover. Every payment goes into an escrow account (履約保證專戶), a third-party account held by a bank or a building management company, never directly to the seller.
Step 1: The offer, two ways to make it
A formal offer uses one of two tools: earnest money, a sum handed to the agent with your offer, or an offer letter (要約書), a written offer with no money attached. Both are legally binding. You state your price and conditions, including the handover date; the agent negotiates with the owner; the moment the owner signs, a contract exists and the earnest money becomes a deposit (定金) counted towards the price. Before the owner signs you can withdraw and get every dollar back. After, backing out forfeits the deposit, and backing out of an offer letter is usually worse: a 3% penalty on the offer price is common.
Our view: Once the seller agrees, both tools carry the same legal weight; the difference is whether you pay first. If funds are tight or you are still comparing homes, use the offer letter; use earnest money only when you are sure and want a stronger negotiating position. Decide your walk-away price first: the negotiation window (typically 3 days) is for bargaining, not for making up your mind. See the documents you sign.
Step 2: Signing and sealing, money into escrow
Signing day (week 1). Bring your identity document, your personal seal (印章) and the signing payment, typically 10% of the price. A land administration agent (代書, the licensed professional who handles title transfer) reads the contract with you clause by clause: price and payment dates, handover date, and what is handed over as is, including how leaks and damp are covered.
The signing payment goes into escrow, less the earnest money already paid. You also sign two promissory notes (本票): one securing the signing payment in case the buyer defaults, one guaranteeing you can pay the balance after transfer. The seller brings the original title deed and a transcript (謄本, the land registry extract) issued that day.
Sealing (week 2). Sealing (用印) completes the official deed the land office needs. You pay the sealing instalment, typically another 10%, into escrow; the seller supplies a seal certificate (印鑑證明) issued within the past year and the registered seal; the agent files the contract tax and land value increment tax returns.
Our view: Escrow is not optional, ever. The fee is typically about 0.06% of the price, split equally: on a NT$15,000,000 home each side pays NT$4,500, and it buys money and title changing hands at the same moment. If anyone asks you to wire the price directly to the seller, walk away. See escrow explained.
Step 3: Mortgage and loan signing
Apply to the bank the moment you sign; do not wait for sealing. The bank reviews salary transfer records, withholding statements and your credit bureau report, and appraises the home. The loan-to-value ratio is applied to the appraisal, not your purchase price; if you overpaid, the bank will not cover the gap. After approval comes loan signing (對保): go through the loan contract line by line for interest rate, term, grace period, lock-in and early repayment penalties. The mortgage is then registered at 1.2 times the loan amount, which is standard practice, and the bank disburses into escrow only after title transfer.
Our view: Apply to 2 or 3 banks at once and choose on lending terms, not on how friendly the loan officer is. If you are between jobs or your income is complicated, strengthen your proof of income or add a co-borrower first.
For foreign nationals: The Chinese page points to the New Youth Housing Loan 3.0 (新青安3.0), a government programme for ROC citizens with household registration (戶籍). Without household registration it generally does not apply; plan on a standard bank mortgage and ask us which lenders work with foreign buyers. See debt ratios and your mortgage.
Step 4: Taxes, title transfer and payoff
Tax payment (weeks 3 to 4). The buyer pays contract tax (契稅, 6% of the assessed building value), stamp duty, registration fees and the agent’s fee. The seller pays land value increment tax (土地增值稅; the 10% owner-occupier rate is tied to household registration, so foreign owners should plan on the general rate) and files the house and land income tax (房地合一稅) after transfer.
Title transfer (week 4). The agent files the ownership transfer at the land office and registers your mortgage the same day. The home is now in your name, but the money has not moved and the seller has not been paid. That is escrow working as designed.
Payoff and disbursement (week 5). Most sellers still have a mortgage. Your loan is released into escrow, the old loan is paid off and discharged, the title is confirmed clean, and only then is the balance released to the seller. In the wrong order this is a disaster; in the right order it is routine.
Step 5: Inspection and handover (week 6)
Check item by item: cracks or water stains on walls, floors and ceilings; plumbing and wiring; doors, windows and hardware; the appliances agreed in the contract; water, electricity, gas and management fees settled and transferred; every key, access card and fob. If you find a problem, do not accept the keys; negotiate repairs or a price retention first, because once you hold the keys you have no leverage. See the home inspection checklist.
Our view: Inspect in daylight, when cracks, water marks and sloping floors show best, and ideally right after rain, when leaks appear on the spot. We bring a full checklist to every handover we attend.
The cash you need, not just the down payment
With an 80% loan, total cash lands at roughly 28 to 33% of the price. Many first-time buyers save the 20% down payment and forget the other 8 to 13% for taxes, commission and a renovation reserve.
| Item | Amount or formula | When |
|---|---|---|
| Earnest money (converts to deposit) | Typically 1 to 2% of price | At offer |
| Signing payment plus sealing and tax payment | About 10% of price each | Week 1 / weeks 2 to 3 |
| Contract tax | Assessed building value × 6% | Tax stage |
| Stamp duty | (Assessed building value + announced land value) × 0.1% | Sealing |
| Registration fee | (Declared land value + building value) × 0.1% plus certificate fee | Transfer |
| Land administration agent fee | About NT$25,000 (depends on complexity) | Each stage |
| Escrow fee | Price × 0.06%, split equally | Signing |
| Buyer’s agent commission | Typically 1 to 2% (per contract) | Handover |
The most common failure is not overpaying but putting all your cash into the down payment and being unable to afford an air conditioner after handover. The interactive calculator is on our Chinese page (link); it estimates tax and fees with the assessed value at one tenth of the price. Full breakdown: buying and selling costs.
FAQ
Why two promissory notes at signing? Is that normal?
Yes, it protects both sides. One secures the signing payment against a buyer walking away without cause; the other guarantees the balance after transfer. Afterwards the agent tears them up on the spot, so they never circulate.
Is escrow compulsory? What does it cost?
Always. About 0.06% of the price, split equally, so NT$4,500 each on a NT$15,000,000 home. It is the best-value insurance in the whole process.
What if the bank is slow and I miss the handover date?
Leave a generous handover window in the contract, add an extension clause if needed, and apply immediately after signing. In busy seasons (year end, around rate changes) approvals often take over a month.
How long does a resale purchase take?
About 6 to 8 weeks: two from signing to sealing, two for tax and transfer, two from payoff to handover. Add 2 to 4 weeks for an old mortgage payoff, a tax relief application or a busy bank season.
What percentage of the price do I need in cash?
With an 80% loan: 20% down, about 3% for taxes, commission and escrow, and 5 to 10% for renovation and reserve, so roughly 28 to 33%.
My savings fall short. Can I borrow a higher percentage?
You can ask, but do not overstretch. The New Youth Housing Loan 3.0 lends up to 80% (limits of NT$10,000,000 to NT$15,000,000 by household type, term up to 40 years, household registration required), and ordinary banks occasionally offer above 80% to strong applicants. A higher ratio means a heavier monthly payment, and any appraisal shortfall must be covered in cash. Work backwards from a monthly payment no higher than one third of household income.
Walk the process with professionals
With three licensed land administration agents in-house, the agent and your adviser sit with you from offer to handover. You make the decisions; we guard the paperwork. Contact us or start at the buying hub.