According to the Land Act, annual property rentals cannot exceed 10% of the total value of the property. For government built housing, rentals cannot exceed 8% a year. Land values are adjusted annually for tax purposes. If your landlord intends to increase your rent when you renew your contract, his tax liabilities will also increase.
Deposits, as in most countries, are standard practice in Taiwan. The landlord will usually ask for one to three months rent as a security deposit. This is fully refundable (without interest) at the end of your contract, providing no damage has been done to the property.
The Land Act, however, limits the amount of a deposit to two months’ rent. The Land Act also states when a cash deposit is made, any interest accrued on the deposit shall count towards the rent.
In reality, not many people abide by the law fully. The landlord will charge a rent and ask for a deposit, and the tenant dutifully pays. Any necessary repairs made on the apartment will be deducted from the deposit.
Tenant and landlord rights
According to the law, the landlord cannot evict the tenant unless one of these conditions occurs:
- The landlord wants the house to live in or to renovate it
- The tenant sublets the house without landlord’s knowledge / consent
- The tenant fails to pay the rent for two months, ie. the deposit has been used to cover the unpaid months and the tenant still doesn’t pay
- The tenant uses the house for illegal activities
- The tenant damages the house and refuses to pay compensation
In the case of a breach of contract, the landlord is required to provide written notice to the tenant, seven days in advance of the eviction. The tenant is then required to pay any unpaid rent, plus two months rent as compensation for losses incurred by the landlord from the termination of the contract.
In general, if you wish to end your contract early, you must give 30 days notice and pay one month’s rent as a penalty.
For an example of a Model Tenancy Agreement click on the link.
In reality, the Taiwanese rental system is very informal. Though the law states a maximum of two months’ rent can be given as a deposit, three months isn’t unheard of. Contracts are not mandatory, but for your own security, it is best to insist on one. Standard contracts can be found at 7/11 stores.