This case study tells an analytical story of Taiwan’s “floating” transfer of development rights (TDR) through the lens of land-based finance. We call the Taiwanese TDR model “floating” because it does not legally require planning designation for the areas where TDR density bonus can be used and gives developers a large degree of legal freedom to build TDR projects almost anywhere in the city. This enhanced market flexibility has made TDR extremely popular in Taiwan, even though planners have no control over where such projects take place. The case study introduces the reserved land issue (baoliudi) that gave rise to Taiwan’s floating TDR, examines its ineffective mechanism of land value capture, analyzes the impacts on housing prices and community environments, and discusses two possible solutions for reforming floating TDR (a points-based system and a market-based system) and their political feasibilities. The goal is to highlight the difficult but central role of planning in ensuring that market-enabling tools such as TDR serve the public interest.