Korea REITs Association Requests Easing of Acquisition Tax Regulations on Purchase-Type Rental Housing REITs and Listed REITs

[Asia Economy Reporter Noh Kyung-jo] The Korea REITs Association announced on the 25th that it has proposed to the Ministry of Land, Infrastructure and Transport and the Ministry of the Interior and Safety to ease acquisition tax regulations on purchase-type rental housing REITs and to reduce acquisition tax on listed REITs.

In the proposal, the association stated, "Purchase-type rental housing REITs contributed to the supply of affordable rental housing until June 17, 2020, before the housing policy was announced, but new projects have been halted since the policy was implemented," adding, "This is because acquisition tax was quadrupled, the same as for speculative corporations." According to the association, before the policy announcement, 10 purchase-type rental housing REITs operated a total of 2,919 rental units.

It further emphasized, "Unlike speculative corporations aiming for short-term profits, purchase-type rental housing REITs have contributed to affordable housing stability through long-term rental housing," and urged, "Please improve the system so that rental housing can be continuously supplied to contribute to affordable housing stability." The association also highlighted that, recently, due to the real estate market conditions, housing purchase demand has decreased while rental demand has increased, making it a necessary time to supply adequate rental housing.

It added, "Purchase-type rental housing REITs are required to operate rentals for at least eight years and are managed through approval procedures by the Ministry of Land, Infrastructure and Transport, so given the nature of REITs, they can contribute to housing market stability and national economic development without issues of preferential treatment."

The association also requested acquisition tax reductions for listed REITs. The purpose is to increase the disposable income of citizens through stable dividends from listed REITs and to contribute to livelihood stability and economic revitalization. Acquisition tax reductions were previously implemented from 2002 until the end of 2014.

Regarding this, the association explained, "Currently, 21 listed REITs are in operation, and the number of individual investors is approaching 400,000, showing growing interest," adding, "Compared to other stocks, listed REITs have higher dividend yields, offering the advantage of generating cash flow. They are suitable for income-type elderly populations who prefer regular cash flow in retirement."

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