Government: "Temporary 1-Home 1-Sale Right Also Eligible for Capital Gains Tax Exemption Special Case"

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[Asia Economy Reporter Moon Chaeseok] The government will provide capital gains tax exemptions even for those who temporarily hold one housing unit and one pre-sale right.

On the 19th, the Ministry of Economy and Finance stated in a press release, "The government plans to grant special exemptions from capital gains tax for one-homeowners holding pre-sale rights under the temporary two-homeowner rule," adding, "We plan to establish exemption provisions through amendments to the enforcement decree in line with future amendments to the Income Tax Act."

The government plans to create special provisions for one-homeowners holding pre-sale rights by referring to the current temporary two-homeowner (one house + one cooperative member's move-in right) capital gains tax exemption applied to one-homeowners holding cooperative member move-in rights.

According to the current enforcement decree of the Income Tax Act, if a one-homeowner acquires a cooperative member's move-in right before transferring the house, capital gains tax exemption as a single household with one house is applied to the previous house when it is sold within three years from the acquisition date of the cooperative member's move-in right.

Therefore, it is expected that the Income Tax Act enforcement decree will be amended to apply exemptions for those holding one house and one pre-sale right, provided they sell the previous house within three years after moving into the pre-sold house.

Previously, the government and ruling party announced through the '12·16 Measures' that pre-sale rights would be included in the housing count when calculating capital gains tax upon selling houses in regulated areas.

This content was introduced as a bill to amend the Income Tax Act, jointly proposed by Representative Go Yong-jin, the ruling party's floor leader on the National Assembly's Planning and Finance Committee.

Under the tax law, a person owning one house and one pre-sale right was considered a one-homeowner, but going forward, they will be regarded as a two-homeowner.

Because of this, concerns have been raised that those attempting so-called "house switching" by purchasing pre-sale rights while still owning their existing home will face significantly increased tax burdens due to the imposition of heavy capital gains tax, even if they are not speculative buyers.

This content was produced with the assistance of AI translation services.