97% of Minors Who Purchased Homes, Including 7-Year-Olds and Landlords, Engaged in 'Gap Investment'

Number of Minors Paying Comprehensive Real Estate Tax Doubles in One Year

Photo by Yonhap News

As the number of minors purchasing houses has recently increased significantly, it has been revealed that most of the reasons for purchasing houses are for 'rental' purposes. This is essentially parents engaging in gap investment using their children's names, which is criticized for deepening wealth inheritance and polarization.

According to data submitted by the Ministry of Land, Infrastructure and Transport to Min Hong-cheol, a member of the National Assembly Land, Infrastructure and Transport Committee from the Democratic Party of Korea, from September 26, 2017, when the submission of housing fund procurement plans was implemented, to December 31, 2021, the number of cases nationwide where minors purchased houses for rental purposes according to the housing fund procurement plans was 1,157, accounting for 95.1% of the total 1,217 cases.

Among these, in Seoul, the number of cases where minors purchased houses for rental purposes was 358 out of 366 cases, accounting for 97.8%, recording the highest rate among metropolitan cities following Sejong (100%, 11 cases). Additionally, in the metropolitan area including Gyeonggi-do (95.4%, 391 cases) and Incheon (95.3%, 142 cases), the proportion of minors purchasing houses for rental purposes was higher than the national average of 95.1%.

Over the past five years (2017?21), the total number of houses purchased by minors was 2,749, with the total purchase amount reaching 514.2 billion KRW.

The annual number of house purchases and purchase amounts by minors were ▲2017: 321 cases, 71.2 billion KRW ▲2018: 291 cases, 67.8 billion KRW ▲2019: 292 cases, 59.6 billion KRW ▲2020: 634 cases, 118.8 billion KRW ▲2021: 1,211 cases, 196.8 billion KRW, showing a continuous increase.

Min Hong-cheol said, "While the number of house purchases by minors is rapidly increasing, most of the reasons have been revealed to be for rental purposes. The government must thoroughly investigate whether there have been any illegal real estate transactions or disguised gifts and prepare measures to address the rapidly increasing wealth inheritance and polarization."

◆The number of minors paying comprehensive real estate tax doubled in one year... 673 last year

Meanwhile, the number of minors subject to comprehensive real estate tax also nearly doubled compared to the previous year. Due to the sharp rise in real estate prices, capital gains from real estate transfers by minors also increased significantly.

According to data received by Kang Jun-hyun, a member of the Democratic Party of Korea, from the National Tax Service, as of last year, the number of minors under 20 years old subject to comprehensive real estate tax was 673, with the tax amount totaling 1.651 billion KRW. The tax amount per minor reached 2.45 million KRW.

This represents an increase of 83% and 124%, respectively, compared to 2020 when 366 minors were taxed 736 million KRW.

The number of minors paying comprehensive real estate tax has been rapidly increasing every year from 180 people (241 million KRW) in 2017. The comprehensive real estate tax is imposed when the total publicly announced price of houses owned by an individual exceeds 600 million KRW. For a single household with one house, the threshold is 1.1 billion KRW.

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