Hong Nam-ki: "Tax Disadvantages for Participants in the 2·4 Plan Public Purchase Will Be Resolved... Improvement Plan Prepared" (Comprehensive)

Year-Round Intensive Investigation in Overheated Areas of the Seoul Metropolitan Area
Finalizing Discussions on Taereung CC's Status as New Housing Site in the Second Half

[Image source=Yonhap News]

[Sejong= Asia Economy Reporter Kim Hyunjung] The government is preparing tax improvement measures such as acquisition tax reductions and comprehensive real estate tax exemptions to ensure that landowners and project implementers participating in the 2·4 Supply Plan projects do not face tax disadvantages. Along with this, the government will continue to respond to unfair practices by conducting year-round intensive investigations into speculation and tax evasion suspicions in overheated areas of the Seoul metropolitan area through collaboration with local governments.

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki held the 24th Real Estate Market Inspection Meeting at the Government Seoul Office on the 17th and stated, "Unlike typical general maintenance projects, many projects under the 2·4 Plan proceed in the form of 'public acquisition,' where the public sector acquires housing during the implementation process." He added, "We will resolve any potential tax disadvantages for landowners and project implementers that may arise during this process." For landowners participating in public direct implementation projects and urban complex projects under the 2·4 Plan, acquisition tax will be reduced to the level of general maintenance projects when acquiring completed housing after land contribution to the public, and project implementers will be exempted from comprehensive real estate tax on all real estate of the acquired landowners.

To revitalize small-scale housing maintenance projects (under 200 households or less than 10,000㎡ based on reconstruction standards), tax incentives will also be strengthened to the level of general maintenance projects. Landowners participating in future projects will be eligible for capital gains tax exemption on one household one housing right, and income and sales of small maintenance associations arising during sales processes will be exempt from corporate tax and value-added tax. Deputy Prime Minister Hong said, "Detailed contents by project stage and type will be distributed by the Ministry of Land, Infrastructure and Transport after confirmation through this meeting body."

The government expects the effects of the supply plan to be felt in earnest from 2022 onward. He explained, "With the expansion of completions after May, it will be possible to secure a supply volume at the average level by the end of the year, and the effect of supply expansion will be more noticeable after 2022." The government anticipates securing 460,000 housing units nationwide, including 83,000 units in Seoul, by the end of this year. Furthermore, it plans to secure 81,000 units in Seoul and 489,000 units nationwide next year. Deputy Prime Minister Hong stated, "The government will prioritize 'expanding housing supply' to resolve uncertainties in the real estate market and control market expectations," adding, "We will consistently pursue policy directions of protecting actual demand and strictly cracking down on market disturbances."

Regarding the new housing site projects announced in the 8·4 Plan, it was explained that the selection of Taereung CC will be finalized in the second half through consultations with local governments and Seoul City, and early supply of other sites such as Yongsan Camp Kim and Public Procurement Service sites is underway. Additionally, among Seoul City’s jurisdictional sites, the design competition for Myeonmok Administrative Town will be held in the second half, and the unsold site in Magok is scheduled to begin construction in July next year.

He reiterated the government’s determination in the 'war against speculation.' Regarding the recent detection of 178 violators of real estate transaction order, including speculative real estate in Gwacheon Knowledge Information Town, he said, "Since speculation and unfair market practices are factors causing market instability, we will continue to respond strongly." He also emphasized, "In overheated areas of the Seoul metropolitan area, the Real Estate Transaction Analysis Planning Team will conduct year-round intensive investigations through collaboration with local governments, and any suspected cases of speculation, illegality, unfairness, or tax evasion will be strictly dealt with without exception, including referral for investigation."

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