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During 2012–2017, a total of 1,144 highly pathogenic avian influenza (HPAI) H5 outbreaks were reported in Taiwan. We conjectured the current 3‐km radius of the post‐outbreak containment policy could fail to effectively alleviate the current ongoing epidemics of HPAI H5 in Taiwan. The high intensity of localized transmission of HPAI H5 at certain focal hotspots was identified to follow the spatial distribution of poultry‐raising locations through our hotspot analyses on the HPAI H5 outbreak locations from 2015 to 2017. We then applied 3‐, 5‐ and 7‐km circular buffer zones to 15,444 registered poultry‐raising locations to inspect the characteristics of the poultry‐raising neighbourhood. Three spatial regression models using Bayesian inference were established to infer the risks attributable to poultry‐raising characteristics in the corresponding buffer areas. The different buffer radii were treated as a sensitivity analysis of the influential range of neighbouring farms on the HPAI H5 outbreak occurrence, so as to evaluate the effective radius for post‐outbreak containment. Evidence showed that the risks of outbreak occurrence were associated with increasing numbers of poultry‐raising locations in both 3‐km (relative risk [RR] 1.005, 95% confidence interval [CI] 1.002–1.008) and 5‐km buffer areas (RR 1.005, 95% CI 1.004–1.007), whereas in the 7‐km buffer model, no association between densely populated locations and increasing risks of outbreaks was observed (RR 1.000, 95% CI 0.999–1.001). Therefore, an extension to a 7‐km radius for the post‐outbreak containment policy (rather than a 3‐km radius as in the current policy) is recommended to effectively mitigate further spreading of HPAI H5 outbreaks among neighbouring farms. Overall, we demonstrated that the densely populated locations with multiple poultry species raised in proximity as defined with 3‐, 5‐ and 7‐km buffer areas facilitated H5 HPAI outbreak diffusion and shaped the scale of HPAI H5 epidemics in Taiwan. [ABSTRACT FROM AUTHOR]