"Won't Be Able to Buy a House Like This" "Better to Sell to Someone Else"… Record-High Housing Sales and Gift Transactions (Comprehensive)

Record High Nationwide Housing Sales and Gift Transactions in First Half of Year
Sales 620,878 Units · Gifts 60,270 Units

Evaluation of Government's Strong Market Regulation Impact
Multi-homeowners: "We'd Rather Pass It On"
Non-homeowners: "Before Prices Rise Further"

[Asia Economy Reporter Lee Chun-hee] It has been revealed that both housing sales transactions and gift transactions in the first half of this year recorded all-time highs. The government's stringent policies seem to have rather fueled 'panic buying' and gifting, exacerbating market confusion.

According to the Ministry of Land, Infrastructure and Transport and the Korea Real Estate Board on the 22nd, the nationwide housing sales transactions in the first half of this year were 620,878 cases, and gift transactions were 60,270 cases. Both are the highest ever since the housing transaction statistics began in 2006.

These figures surpassed the previous highest transaction volumes of 610,796 cases and 54,655 cases in the first half of 2015, respectively. If this trend continues, there is a possibility of exceeding the annual maximums of 1,193,691 cases and 111,863 cases recorded in 2015.

Analysts suggest that the sharp increase in transaction volume is due to the government's strong tightening measures. The government’s strategy is to increase the supply of listings in the market by imposing heavier taxes on multi-homeowners, but multi-homeowners are instead responding with 'I'd rather pass it on.' Despite continuous pressure, a seller's market atmosphere is forming, causing a chain reaction of price increases. Meanwhile, 30-40-year-olds with low subscription scores engage in panic buying, leading to a vicious cycle of rising prices.

In fact, in the case of apartment gifting in Seoul, the number of monthly gift cases first exceeded 1,000 in December 2017 with 1,013 cases. The following year, in 2018, the annual number of apartment gift cases also surpassed 10,000 for the first time, reaching 15,397 cases.

Gift acquisition tax to be strengthened as early as next month... 'Let's quickly pass on to avoid taxes'

The government and ruling party have taken a firm stance against tax avoidance strategies through gifting. Currently, in the National Assembly, Representative Han Byung-do of the Democratic Party (ruling party whip of the Administrative Safety Committee) has proposed a partial amendment to the Local Tax Act that raises the gift acquisition tax rate to the maximum 12% level of the sales acquisition tax rate included in the July 10 real estate measures.

What stands out is the enforcement date. Representative Han specified in the supplementary provisions of the bill that "it shall take effect from the date of promulgation" and "apply to those whose tax obligations arise after enforcement." The ruling party and government plan to pass the bill as early as the beginning of next month.

Multi-homeowners who intended to avoid heavy taxes by gifting to their children cannot help but feel rushed. They must quickly weigh the pros and cons of gifting versus selling and proceed with housing disposal immediately.

Woo Byung-tak, team leader (tax accountant) of Shinhan Bank Real Estate Investment Advisory Center, said, "About two weeks after the announcement of the July 10 measures, inquiries related to gifting began to come in," and analyzed, "As expectations arise that the law will be enforced next month, gift transactions are likely to increase further by the end of this month." Considering that it usually takes about two weeks for name transfer and registration, the decision on gifting must be made within this month.

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