Discussion on Easing Capital Gains Tax Surcharge... "Need to Encourage Multi-Homeowners to List Properties on the Market"

Hong Nam-ki: "Encouraging Multi-Homeowners to Put Properties on the Market Is Also an Important Supply Policy"

[Asia Economy Reporter Minji Lee] It has been revealed that a plan to ease the capital gains tax surcharge on multi-homeowners in order to increase housing supply is being discussed within the ruling party and government. The intention is to relax the tax rate amid a significant decline in real estate transactions and acquisitions due to consecutive real estate measures, encouraging multi-homeowners to put their existing properties on the market.

Real estate stock photo / Photo by Mun Ho-nam munonam@

According to the Democratic Party of Korea and government authorities on the 10th, a plan to ease the capital gains tax surcharge policy for multi-homeowners in regulated areas, which will be applied from June this year, is being cautiously reviewed within the ruling party and government. It is expected that this will be carried out alongside the revision and supplementation of real estate supply measures and real estate tax policies being prepared by the new Minister of Land, Infrastructure and Transport, Byeon Chang-heum.

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki’s remarks also increase the likelihood of a shift toward easing the capital gains tax surcharge policy. On the same day, appearing on a KBS broadcast program, Deputy Prime Minister Hong said, “There is a part where psychological stability can be expected due to the announcement of housing supply,” and added, “It is also an important supply policy to have those who own three or four houses put their properties on the market.”

Previously, through the July 10 real estate measures last year, the government raised the capital gains tax surcharge rate by 10 percentage points for multi-homeowners transferring houses in regulated areas. Two-homeowners were subject to a 20 percentage point surcharge, and three-homeowners a 30 percentage point surcharge. The intention was to impose punitive-level taxes on multi-homeowners and real estate speculators involved in short-term housing transactions to bring out properties for sale, but the actual impact on the market was not significant. Rather, multi-homeowners have been choosing to gift properties to their children rather than putting them on the market.

Within the ruling party and government, there is currently a stage of deliberation over the effectiveness of such a policy in actually bringing properties to the market and concerns that it could be interpreted as a retreat from existing real estate policies. Meanwhile, it is reported that there is also a considerable hardline faction within the ruling party insisting on maintaining the existing measures. Since there were logical and justifiable reasons for pursuing the existing measures, some view it as premature to decide on easing the surcharge.

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