Transition Team Proposes One-Year Deferral of Capital Gains Tax Surcharge on Multiple Homeowners Starting April

Choi Sang-mok, Secretary of the Economic Subcommittee 1, Briefing After Yoon President-elect's Work Report
To Encourage Listings Before June Property Tax Assessment Date
Requested Government to Postpone from April... "If Not, Immediate Enforcement Decree Revision Upon May Inauguration"

[Image source=Yonhap News]

[Asia Economy Reporters Kim Hyemin and Jung Donghoon] The Presidential Transition Committee (PTC) will first pursue a plan to temporarily exclude the increased capital gains tax rate on multi-homeowners for one year as part of its real estate tax policy pledges.

Choi Sangmok, the spokesperson for the PTC's Economic Subcommittee 1, held a briefing on the 31st at the PTC office in Tongui-dong, Jongno-gu, Seoul, and requested the government to amend the Enforcement Decree of the Income Tax Act so that it can be applied from capital gains realized as early as next month. The Economic Subcommittees 1 and 2 had conducted a work report session presided over by President-elect Yoon Seok-yeol earlier that morning.

Spokesperson Choi said, "After internal discussions, we decided to take the necessary measures to temporarily exclude the increased capital gains tax rate on multi-homeowners for one year starting in April as the first step in normalizing the real estate tax system."

The decision to first introduce the temporary exclusion of the increased capital gains tax rate on multi-homeowners is intended to encourage the release of listings before the June 1st property tax base date. Choi explained, "The exclusion of the increased tax rate for multi-homeowners is a measure to alleviate excessive tax burdens and stabilize the real estate market, which has already been promised to the public. Especially, with the recently announced significant rise in the 2022 official property prices, the holding tax burden on multi-homeowners is expected to increase substantially, so we want to take preemptive action."

He continued, "The swift implementation of the exclusion of the increased capital gains tax rate for multi-homeowners aims to reduce the burden on those with excessive comprehensive real estate tax liabilities so that they can sell their homes before the June 1st property tax base date, thereby encouraging listings and stabilizing the real estate market."

The PTC requested the government to promptly announce the temporary exclusion policy and amend the Enforcement Decree of the Income Tax Act so that the exclusion applies from capital gains realized as early as next month. Choi said, "If the current government does not take action, the new government will immediately amend the Enforcement Decree upon its inauguration so that the exclusion applies for one year starting from the day after the inauguration on May 10th."

Regarding the possibility of further extending the grace period for the increased capital gains tax rate on multi-homeowners, he said, "It is difficult to comment at this time." On the permanent abolition of the increased tax rate, he added, "Fundamental changes require legislative amendments. The overall aspects will be reviewed by the real estate task force."

In response to criticism that a price stabilization policy should also be announced alongside the easing of reconstruction regulations, which is driving up housing prices, he said, "Today's announcement was not made considering the overall supply and demand in the real estate market. It is intended to alleviate the difficulties of multi-homeowners who want to dispose of their homes before the comprehensive real estate tax is imposed. There will be additional announcements regarding comprehensive measures considering supply and demand."

Meanwhile, the PTC expressed the position that the special case for one household, one house for temporary two-homeowners should also be promptly implemented starting this year. Choi said, "They have also inquired about the new government's policy direction ahead of the June 1st property tax base date. There is a growing need to ease the comprehensive real estate tax burden for temporary two-homeowners who have unavoidable reasons such as moving or inheritance."

Additionally, the PTC requested the government to expand the current 20% fuel tax reduction to 30%. Choi said, "Please implement an additional reduction to ease the burden of rising prices even a little. Since the current government has also announced that it is considering an additional reduction, we will wait for further measures such as amending the Enforcement Decree next month."

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