Finance minister Li Sush-Der did not say how much the tax would be or when it would be implemented. The measure needs final parliamentary approval.
Taiwan stopped taxing undeveloped land in 1985.
The government has recently stepped up measures to combat rising property prices that have put home buying in some parts of the island beyond the means of average earners.
In a recent report, Citi predicted housing prices in Taipei would rise 7 to 10% this year after 12% growth in 2010.
The government is planning a tax on short-term property transactions and has announced plans to restart construction of affordable housing.
The central bank, meanwhile, has cut the maximum mortgage allowed for second homes in Taipei to 60% from 70% and extended the rule to three more areas around the capital.
It has also ordered increased oversight of mortgage lending, calling on banks to submit bi-weekly reports on property-related lending.
Other Asian countries are looking to tighten property market regulations on fears of asset bubbles. — Reuters
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