[Real Estate AtoZ] "Subscription Savings Account Instead of Housing"... How to Gift It

[Asia Economy Reporter Ryu Tae-min] While the number of subscribers to the subscription savings account, considered essential for 'owning a home,' is decreasing, the number of name changes on subscription savings accounts for gifting purposes has recently increased significantly. This is because, unlike the declining trend in sale prices, the pre-sale prices are rising, making the advantages of subscription less significant than before. On the other hand, it appears that the 2030 generation with low points is trying to increase their mid- to long-term possibility of 'owning a home' by receiving gifted subscription savings accounts.

According to the Korea Real Estate Board's Subscription Home as of August 31, the total number of nationwide housing subscription comprehensive savings account subscribers is 27,003,542. This is about 30,000 fewer than the 27,031,911 recorded at the end of June.

The decrease in the number of subscribers seems to be influenced by the rise in pre-sale prices. While house prices are falling due to the impact of interest rate hikes and other factors, pre-sale prices continue to rise, causing them to become similar to or even surpass the sale prices of nearby newly built complexes. As the advantages of subscription diminish, there is no reason to keep a large sum of money in the subscription savings account.

On the other hand, the gifting of subscription savings accounts has been increasing annually. According to the 'Recent 5-Year Subscription Savings Account Name Change Status' received by Kim Sang-hoon, a member of the People Power Party, from the Ministry of Land, Infrastructure and Transport and the National Tax Service, the number of name changes was only 4,922 in 2017 but recorded 7,471 last year. This represents a 52% increase over five years.

How to Inherit a Subscription Savings Account

Name change literally means changing the owner of the account. Through a name change, the existing account's subscription period, number of payments, and payment amount can be inherited as is. In the case of private housing with a 84-point scoring system, if the subscription period is over 15 years, up to 17 points can be secured. Therefore, inheriting an old account is a shortcut for the 2030 generation with a short subscription period to gain a favorable position in subscription competition.

However, not all accounts or name changes are possible. Depending on the type, gifting or inheritance is possible. Subscription savings and subscription deposits or installment savings accounts joined before March 26, 2000, can be gifted or inherited to children, spouses, grandchildren, etc., at will. On the other hand, housing subscription comprehensive savings accounts or subscription deposits/installment savings accounts joined after March 27, 2000, can be inherited by children only after the subscriber's death. There is no particular limit on the number of name changes.

Since the principle is one account per person, the person inheriting must close any previously owned accounts. Also, when changing the name between spouses or direct lineal ascendants/descendants, a change in the head of household on the resident registration certificate must be a prerequisite. It is not possible if the head of household is simply separated. For example, if a father gifts an account to his son, it is possible only if the father is a household member and the son is the head of the same household.

Name changes on subscription savings accounts are essentially transferring property and may be subject to gift tax or inheritance tax. However, under current law, direct lineal ascendants and descendants are exempt from gift tax up to 50 million KRW over 10 years, so the likelihood of tax being imposed is low.

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