Property not lived in by the owner and sold within two years of purchase will be taxed 10-15%.
Luxury goods will also face a 10% tax, which could come into effect by June.
Real estate agents and the property sector have opposed the tax. They fear it could hurt sales. But surveys show most Taiwanese people favour the move.
The tax is the most drastic measure the government has taken to tackle property prices that have sky-rocketed to a level that is unaffordable for average wage earners.
The richest 20% of the population has an average household income that is six times higher than the poorest 20%.
Taiwan is one of the world's top luxury markets.
Besides property, private jets, yachts and luxury cars valued at more than $100,000 (£61,000) will face a 10% tax.
Golf club membership, coral, leather, and fur coats worth more than $17,000 will also be taxed.
Construction stocks have already tumbled and property sales have dropped.
Even the European Chamber of Commerce has weighed in - it fears the tax could hurt imports of BMWs, Mercedes and other imported luxury goods.
Sceptics however say the rich will still be able to afford to buy the goods.
But with surveys showing most Taiwanese people favour the tax, the ruling and opposition parties, facing a presidential race early next year, passed the legislation with little bickering.
Money from the tax will go towards funding social services.
Borrowed from www.bbc.com
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