7·10 Measures Follow-up 'Real Estate 3 Acts' Passed in National Assembly Standing Committee... Multi-homeowners' Property Tax and Transaction Tax Increase

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[Sejong=Asia Economy Reporter Kim Hyunjung] The follow-up bill to the '7·10 Real Estate Measures,' which expands comprehensive real estate tax and income tax on multi-homeowners and owners of high-priced homes and increases the real estate acquisition tax burden on corporations to stabilize the real estate market, has passed the National Assembly standing committee.

On the 28th, the Ministry of Strategy and Finance announced that the National Assembly's Strategy and Finance Committee approved the 'Comprehensive Real Estate Tax Act, Income Tax Act, and Corporate Tax Act Amendment Bill' aimed at stabilizing the real estate market. The amendment bill contains the tax measures announced by the government on July 10 to stabilize the real estate market.

The amendment to the Comprehensive Real Estate Tax Act includes raising the tax rate by up to 2.8 percentage points from the current 0.6?3.2% to 1.2?6.0% for owners of three or more homes or two homes in designated adjustment areas, according to the taxable standard bracket.

For corporate-owned homes, the highest tax rate of individual comprehensive real estate tax (3% for two or fewer homes or one or fewer homes in designated adjustment areas, 6% for three or more homes or two homes in designated adjustment areas) will be applied as a single tax rate. However, to reduce the burden on elderly owners of one home per household for actual use, the tax credit rate and combined deduction limit for one household one home owners were raised from 70% to 80%.

Members of the Future United Party's Budget and Accounts Committee, including Representative Choo Kyung-ho, are leaving the meeting room in protest against the way the meeting was conducted during the plenary session of the National Assembly's Planning and Finance Committee on the 28th. Photo by Yoon Dong-ju doso7@

Additionally, the tax burden cap for owners of two homes in designated adjustment areas was raised from 200% to 300%, and the tax burden cap on comprehensive real estate tax for corporate-owned homes was abolished.

The existing related law, which allowed unlimited increase in deductions by establishing new corporations and holding properties separately to avoid tax burden, was supplemented by abolishing the comprehensive real estate tax deduction (600 million KRW) for corporate-owned homes.

The amendment to the Income Tax Act added a residency period requirement to the long-term holding special deduction rate for one household one home with an actual transaction price exceeding 900 million KRW (holding period annual 8% → holding period 4%, residency period 4%), and raised the capital gains tax rate for homes held less than two years (including move-in rights and pre-sale rights) and multi-homeowners in designated adjustment areas to up to 70% for short-term holdings under one year. Pre-sale rights will also be included when calculating the number of homes for capital gains tax purposes for one household one home owners or multi-homeowners in designated adjustment areas; however, this will apply only to new acquisitions after January 1 of next year when the law is enforced, as revised by the Strategy and Finance Committee.

Meanwhile, the Corporate Tax Act amendment raised the tax rate on corporate housing capital gains from 10% to 20% in addition to the basic corporate tax rate, and applied additional tax rates on transfer of cooperative members' move-in rights or pre-sale rights.

On the other hand, the three real estate laws including the comprehensive real estate tax amendment bill, which were approved amid the United Future Party's abstention from voting, are scheduled to be submitted to the plenary session after passing through the Legislation and Judiciary Committee by the 4th of next month.

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