Taiwan Raises Second-Home Mortgage Cap to 70 Percent as Central Bank Eases Property Credit Controls

Taiwan's central bank raised the loan-to-value ceiling on a second housing loan to an individual borrower from 60 percent to 70 percent of the purchase price, effective 18 September 2026. The decision, taken at the quarterly board meeting on 17 September, eases the selective credit controls the bank has used to hold back property lending, and it lands while headline policy rates stay flat.

What changed

Two measures moved. The first is the mortgage cap. A natural person buying a second home in Taiwan could previously borrow no more than 60 percent of the property value. That ceiling is now 70 percent. On a NT$20 million apartment, the maximum loan rises from NT$12 million to NT$14 million, and the cash a buyer has to put on the table falls by NT$2 million.

The second is a paperwork requirement on land loans. Borrowers taking a loan to buy land had to submit, in the central bank's words, "a written affidavit specifying the timeframe to commence construction." The board decided to remove that requirement. Land held on credit no longer carries a declared construction start date as a condition of the loan.

Nothing else in the selective credit control framework was announced as changing. The release named no adjustment for high-value housing loans or for corporate buyers, and the caps on those categories stand.

Policy rates were left alone. The discount rate stays at 2 percent, the rate on refinancing of secured loans at 2.375 percent and the rate on temporary accommodations at 4.25 percent. That is the tenth consecutive quarter without a move, according to Focus Taiwan's report on the meeting.

The mechanism

Taiwan's central bank regulates housing credit through selective credit controls rather than through the policy rate. The instrument sets maximum loan-to-value ratios by borrower type and property type, and banks apply them at origination. Because it works on the size of the loan rather than its price, it bites hardest on buyers who are equity constrained, and easing it changes who can transact without changing what anyone pays in interest.

The bank pointed to its own concentration measure as the reason it had room to move. The ratio of real estate lending to total lending across all banks has fallen to 34.44 percent, down from 35.56 percent at the end of March 2026. That ratio is what the controls were designed to bring down, and the release frames the adjustment as a moderate response to a market that has already cooled.

On inflation, the bank forecasts consumer price inflation of 2.03 percent for 2026 and core inflation of 2.16 percent.

What it means for a foreign buyer

The selective credit controls key off the property and the borrower's existing holdings, not nationality. A foreign national who already owns one home in Taiwan and is financing a second now faces a 70 percent ceiling instead of 60 percent, which cuts the required deposit on a second purchase by a tenth of the purchase price.

That is the regulatory ceiling, not an entitlement. Individual banks set their own credit policy on top of it, and lending terms offered to a non-resident borrower are a commercial decision by the lender rather than something the central bank prescribes. The change removes a regulatory constraint; it does not oblige any bank to lend.

For anyone buying land rather than a finished unit, the removal of the construction timetable affidavit is the more consequential item. A buyer financing a land parcel no longer has to commit on paper to a construction start date in order to get the loan approved, which takes a compliance risk off the table for investors holding land through a development cycle.

Context

Foreign nationals acquire real property in Taiwan under Articles 17 and 20 of the Land Act, together with the Operational Directions for Foreigners to Acquire Land Rights in Taiwan. Acquisition runs on a reciprocity principle: a foreign buyer's home country must extend equivalent rights to Taiwanese nationals, and the Ministry of the Interior maintains a table of reciprocal countries covering most nationalities that would otherwise need to produce a certificate of reciprocity.

Registration is handled at the Land Registration Office covering the district where the property sits. A buyer files the land registration application, identification, the sale and purchase contract, tax payment or exemption certificates, the land ownership certificate and, for urban land, a zoning certificate.

Taiwan's property market has been running under tightened housing credit rules for the past two years, a period the central bank credits with reducing property lending, cooling speculation and improving bank risk controls. Buyers assessing a specific project should still verify the counterparty's permit and delivery record separately, since credit policy says nothing about whether a building gets finished. Bektu has looked at that question for Taipei urban renewal developers and for listed groups running property arms. The easing also sets Taiwan apart from its northern neighbour, where the Bank of Japan has been raising its policy rate.