Housing 'Gifted Share' Drops from 36.4% to 11%... "Due to Acquisition Tax Burden"

Demand for housing gifts, which reached a peak last December, has sharply declined this year. This is due to an increased tax burden following changes in the gift acquisition tax base.

[Image source=Yonhap News]

According to the Korea Real Estate Board on the 2nd, among 6,536 housing transactions in Seoul in January this year, 722 were gifts, accounting for 11.0% of the total. Compared to December last year, when gifts accounted for 2,620 out of 7,199 transactions, or 36.4%, this represents a decrease of 25.4 percentage points.

Starting this year, the acquisition tax base for gifts changed from the standard market price (officially announced price) to the recognized market price (transaction case price, appraisal price, auction and public sale price), increasing the tax burden. This led to a temporary surge in gift demand at the end of last year.

The proportion of apartment gifts also significantly decreased. At the end of last year, the share of apartment gifts in Seoul was 29.9%, the highest since the survey began in 2006, but in January this year, it dropped by 19.1 percentage points to 10.8%. In December last year, among 378 apartment transactions in Gangnam-gu, more than half?225 transactions (59.5%)?were gifts, whereas in January this year, only 13 out of 169 transactions (7.7%) were recorded as gifts.

In particular, in Yongsan-gu, gifts accounted for 42 out of 67 transactions in December last year, a gift proportion of 62.7%, but this year, only 1 out of 16 transactions (6.3%) was a gift. Nowon-gu, where many mid- to low-priced apartments are concentrated, also showed a sharp contrast, with the gift proportion exceeding half of total transactions at 50.3% in December last year, but plummeting to 8.3% in January this year.

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