Opposition's Real Estate Measures Revealed... 'Introduction of Official Price Cap System and Easing of Loan Regulations for Non-Homeowners'

[Asia Economy Reporter Naju-seok] The People Power Party announced real estate measures on the 24th aimed at easing loan regulations for the homeless and reducing the tax burden for owners of one primary residence. For the homeless, including youth and newlyweds, the party proposed raising the Loan-to-Value ratio (LTV) and Debt-to-Income ratio (DTI), and applying a 5% cap on official property prices starting this year.

On this day, the People Power Party Policy Committee announced real estate measures aimed at correcting the Moon Jae-in administration's real estate policies. The core of this plan is to expand opportunities for homeownership for the homeless and reduce the burden on owners of one primary residence.

[Image source=Yonhap News]

First, the exemption period for acquisition tax on low-income housing for primary residence purposes will be extended from the end of this year to the end of 2024. The criteria for acquisition tax reduction will also be expanded from the current 70 million KRW or less to 90 million KRW or less, and the housing price limit will be increased from 400 million KRW to 600 million KRW in the metropolitan area.

To help actual demanders secure housing, the LTV and DTI preferential rates for homeless youth and newlyweds will be increased from the current 10 percentage points to 20 percentage points, and income and housing price criteria will also be raised. Additionally, the Debt Service Ratio (DSR) for first-time buyers such as youth and newlyweds will be relaxed from 40% to 50%.

As a short-term measure, the party plans to postpone the capital gains tax surcharge on multi-homeowners starting from the 1st of next month to ease the housing market. A People Power Party official explained, "The goal is to prevent a transaction freeze by postponing the capital gains tax surcharge and providing sufficient time for housing transactions."

To reduce the burden on owners of one primary residence, the party promised to introduce a cap on the increase of official property prices. The cap will limit the increase rate to 5% compared to the previous year. In particular, the cap will be applied immediately from this year's official property prices to curb the nationwide increase of over 19%.

The special property tax criteria will also be raised from the current 600 million KRW to 1.2 billion KRW to reduce the tax burden. Furthermore, the comprehensive real estate tax exemption threshold will be raised from 900 million KRW to 1.2 billion KRW, and the fair market value ratio will be frozen at last year's level, increasing the deduction rate for elderly and long-term owners of one home to up to 90%.

Additionally, the capital gains tax exemption threshold for one household, one primary residence will be raised from 900 million KRW to 1.2 billion KRW.

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