Under Moon Administration, 'Wealth Inheritance' Deepens... Apartment Gifts Increase Threefold

Seoul Apartment Gift Transfer Share 4.5%→14.2%
Seocho-gu 26.8%, Songpa-gu 25.4% Reached
Gangdong-gu Increased 10 Times from 2.5% to 25.7%

[Asia Economy Reporter Kim Hyemin] Since the inauguration of the Moon Jae-in administration, the number of apartment gifts in Seoul has surged more than threefold. In particular, the proportion of gifts increased significantly in areas with high-priced apartments such as Seocho-gu and Songpa-gu.

According to the "Seoul Apartment Transaction Status by Transaction Cause" submitted by the Korea Real Estate Board to Kim Sang-hoon, a member of the National Assembly Land, Infrastructure and Transport Committee from the People Power Party, the proportion of gifts among total apartment transactions in Seoul increased more than threefold from 4.5% in 2017, the first year of the current administration, to 14.2% last year. This is the highest since statistics began. During the previous administration from 2011 to 2016, the average was only 4.5%.

Especially in areas with many high-priced apartments such as Gangnam, the proportion of gifts was higher. Seocho-gu and Songpa-gu accounted for 26.8% and 25.4% respectively last year, meaning one out of every four transactions was a gift. Gangdong-gu was 22.7%, and Yangcheon-gu was also high at 19.6%. Gangnam-gu reached 16.2%.

In particular, Gangdong-gu's gift proportion was only 2.5% in 2017 but surged more than tenfold to 25.7% by May this year. During the same period, Yangcheon-gu increased from 4.7% to 19.5%, and Nowon-gu also rose significantly from 3% to 18.2%.

The sharp increase in the proportion of gifts appears to be because the current government significantly raised capital gains tax rates and comprehensive real estate tax rates, leading multi-homeowners to choose gifting to avoid tax burdens. Currently, the highest capital gains tax rate for multi-homeowners, including local taxes, reaches up to 82.5%, and the comprehensive real estate tax has nearly doubled. On the other hand, gift tax rates range from 10% to 50%, and property deductions of up to 600 million KRW are available.

Assemblyman Kim stated, "This has led to a vicious cycle where wealth inheritance through gifts reduces sales and causes housing prices to rise further," adding, "It is necessary to change policy directions now, including tax relief and easing of transaction and loan regulations."

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