[Yoon Administration's First Livelihood Measures] Tariff Quotas and VAT Exemptions on 14 Items... Real Estate Holding Tax Reverted to 2020 Levels

[Asia Economy reporters Son Seon-hee (Sejong) and Moon Je-won] The government will implement comprehensive price stabilization measures starting in the second half of this year, including exempting various taxes on essential food ingredients such as cooking oil and pork, as well as major industrial raw materials, and reducing education, transportation, and communication costs. It also announced housing stability measures such as easing real estate holding and transaction taxes and expanding the loan-to-value ratio (LTV) for first-time homebuyers. These emergency measures aim to ease the increasingly difficult livelihood conditions as living costs have soared to their highest level since the 2008 global financial crisis, compounded by interest rate hikes.

On the 29th, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho chaired the first economic ministers' meeting under the Yoon Seok-yeol administration and announced the "Emergency Livelihood Stabilization 10-Point Project" containing these measures.

This project focuses on three major areas that directly affect ordinary citizens: "food, living expenses, and housing." To ease the burden of food prices, a zero percent tariff (0%) will be applied until the end of the year on seven food raw materials including cooking oil, pork, wheat flour, and eggs, with an increase in the allocated quota. Additionally, allocation and adjustment tariffs on seven industrial raw materials such as naphtha and industrial urea will be reduced. Value-added tax (10%) on individually packaged processed food products in bottles or cans, such as coffee, cocoa, kimchi, doenjang, gochujang, and soy sauce, will be fully exempted until next year.

As a housing stability measure, the government announced it will restore the property tax burden for single-home real demand households to the 2020 level. Related tax reforms will be promoted in the third quarter to apply the 2021 official property prices to this year's property tax and comprehensive real estate tax. Furthermore, a research project to review the "official price realization plan" promoted during the previous Moon Jae-in administration will be launched, with supplementary measures to be finalized within the year. The recognition period for exemption from acquisition tax surcharges for temporary two-homeowners will be extended from the current one year to two years, and from the third quarter, the LTV cap for first-time homebuyers will be expanded to 80% (previously 60-70%).

To reduce living expenses, a 20 trillion won-scale Safe Conversion Loan for low-income households will be supplied, allowing refinancing of existing high-interest and variable-rate mortgage loans into low-interest and fixed-rate loans. Also, the student loan interest rate for the second semester of this year will be frozen at the first semester level (1.7%), and refinancing opportunities will be provided to those with existing high-interest loans. The individual consumption tax reduction (30%) for passenger cars will be extended for another six months until the end of the year, and fuel price-linked subsidies will be expanded to support the sharply rising diesel prices. To reduce communication costs, the government plans to encourage the launch of a "5G mid-tier plan" starting from the third quarter.

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