Hong Nam-ki "Considering easing property tax for single-home owners... No change planned for multi-home capital gains tax" (Update)

The 35th Real Estate Market Inspection Meeting of Relevant Ministers

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is speaking at the meeting of related ministers to inspect the real estate market held at the Government Seoul Office Building on the morning of the 22nd. 2021.12.22
[Photo by Yonhap News]

[Sejong=Asia Economy Reporter Son Sun-hee] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, dismissed on the 22nd the issue of postponing the heavy capital gains tax on multi-homeowners, stating, "There are no plans to change the tax system considering market stability, policy consistency, and fairness." This clearly expressed the government's opposition amid Lee Jae-myung, the Democratic Party candidate, advocating for the postponement of the heavy capital gains tax on multi-homeowners.

On the morning of the same day, Hong presided over the 'Real Estate Market Inspection Meeting of Related Ministers' at the Government Seoul Office and made these remarks in his opening statement. As the ruling Democratic Party demanded the 'postponement of the heavy capital gains tax on multi-homeowners,' which is completely contrary to the existing Moon Jae-in administration's real estate policy ahead of the election, he repeatedly expressed refusal.

However, regarding the increased holding tax burden such as comprehensive real estate tax and property tax on single-homeowners due to soaring house prices, Hong said, "We have been reviewing supplementary measures to partially ease the tax burden on low-income and middle-class single-homeowners." Earlier, the ruling party and government announced that they were considering applying this year's publicly announced prices to next year's holding tax calculation. As the tax burden sharply increases due to the realization of publicly announced prices on top of already rising house prices, they are effectively planning to 'freeze' the holding tax for one year.

Regarding recent real estate market trends, Hong evaluated, "Although there is a contraction in transactions, price decline cases are spreading in major areas, showing a shift to a downward stabilization trend." He added, "We will consistently and swiftly implement the existing real estate policies to ensure that the recent downward stabilization trend in the real estate market firmly takes root next year."

To this end, the number of pre-sale housing units next year will be increased by 6,000 to 68,000 units, and the number of rental units under the November 19th measures will also be expanded by 5,000 to 44,000 units, securing as much short-term supply as possible.

The 'Urban Development Project Public Interest Enhancement Plan' to excessively reclaim private profits will also be implemented as quickly as possible, and support measures such as providing incentives for win-win landlords, enhancing tenants' rights, and reducing housing burdens will be devised.

Furthermore, for the February 4th urban complex project, nine planned districts (14,000 units) have been designated so far. The main district designation will be completed within the year. The pre-sale in this month's quarter will supply 17,000 units, the highest level of the year, all in preferred locations in the metropolitan area.

Meanwhile, the government has taken measures to block illegal activities related to real estate acquisition by foreigners and other non-residents. Hong said, "There have been continuous signs of some non-residents exploiting information asymmetry to gain illegal and unfair profits, and we intend to establish a comprehensive response system among related agencies." He added, "To prevent illegal inflow and outflow of funds for real estate acquisition by non-residents, the Bank of Korea has been improved to notify the Korea Customs Service of foreigners' domestic real estate acquisition reports, and the information cooperation system is scheduled to be completed by March next year."

He also said, "To block illegal registration of unqualified foreigners as rental business operators, from January next year, foreigners wishing to register as housing rental business operators will be required to state their residence status and period, and those holding visas that do not permit rental business (such as student or short-term visas) will be denied business registration."

Hong added, "To detect cases of multi-homeowner non-residents disguising as single-homeowners, the Ministry of Land, Infrastructure and Transport will prepare necessary statistical production through research projects next year to accurately grasp foreigners' transaction and holding status." He concluded, "Suspected illegal activities found through monitoring will be subject to separate in-depth investigations and strictly dealt with."

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