Will The Resumption of Heavy Capital Gains Tax Change the Game... Capital Flocks to Land Investments

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The government has reaffirmed its policy to end the temporary suspension of the heavy capital gains tax on multi-homeowners on May 9, heightening tension in the real estate market. Analysts say that if the burden of high tax rates on sales becomes a reality, housing investment strategies aimed at short-term gains will inevitably be put under significant constraint.

In particular, as various regulations on lending, holding taxes, and housing subscriptions are working in combination, mainly in the Seoul metropolitan area, an awareness is spreading among investors that "apartments are no longer assets to simply buy and sell, but structural assets for which tax considerations are essential."

As the housing investment environment centered on apartments once again shifts toward stronger regulations and heavier tax burdens, investors are moving to change their asset strategies. In this context, land assets, which are not counted toward the number of housing units and are therefore exempt from the heavy capital gains tax on multi-homeowners, are being reevaluated as a means of long-term value preservation.

For example, in the case of planned land, its use and development potential are clearly defined, and it is equipped with infrastructure conditions, leading to the assessment that development risk is low. Statistics such as the nationwide land price index show that land tends to move steadily upward over the long term, and experts point out that it continues to be attractive as a real asset even amid financial market volatility.

Against this backdrop, Jeonju Ecocity land for public facilities currently on sale is drawing attention as an alternative investment destination. The land for public facilities being supplied within Ecocity in Jeonju as national and public land is assessed to have improved utility and business feasibility, following the recent final announcement of changes to the district unit plan. Under the revised plan, quasi-residential land, block-type detached housing sites, and religious facility sites have seen additional permitted uses and relaxed approval standards, and in some blocks, residential functions are now allowed, thereby expanding the potential uses of the land.

The land for public facilities currently being supplied consists of a total of 62 lots, including 51 quasi-residential lots and 9 parking lots. On quasi-residential land, buildings can be constructed for a wide range of uses such as officetels, commercial facilities, medical facilities, and educational facilities, and some lots can be merged into up to three contiguous lots, offering significant flexibility in land utilization.

Jeonju Ecocity is an area where infrastructure within the urban development district has already been established, and it is being supplied as planned land with completed road networks, approval and permitting systems, and district unit plan guidelines. These conditions lower the initial entry barriers for land investment and are drawing attention from both end-users and investors in terms of long-term asset value preservation and utilization potential.

In fact, previously supplied residential products within Ecocity recorded high subscription competition and sold out completely, and there is also an assessment that this round of land-for-public-facilities sales combines both scarcity and stability, as it represents the last batch of public land for public facilities within Ecocity.

A real estate expert said, "The resumption of heavy capital gains taxation on multi-homeowners is expected to serve as an important turning point in decisions on housing transactions," adding, "Land such as the Ecocity land for public facilities carries relatively lower tax risks and offers potential value from a long-term holding perspective, so it is likely to play an important role in future investment portfolios."

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