The Government to Hold Joint Briefing on Real Estate Policy Progress and Future Plans on the 18th
[Asia Economy Reporter Jang Sehee] The government has announced its intention to implement the strengthened comprehensive real estate tax and capital gains tax policies as scheduled on June 1.
The Ministry of Economy and Finance, Ministry of Land, Infrastructure and Transport, Financial Services Commission, National Tax Service, and National Police Agency held a 'Joint Briefing on the Current Status and Future Plans of Real Estate Policy' at the Government Complex Sejong on the 18th and made this announcement.
The Ministry of Economy and Finance stated, "The government will strictly enforce the policy package, including tax system enhancements prepared to realize fair taxation and stabilize the real estate market, and will thoroughly review related tax systems."
The increase in the comprehensive real estate tax rate (for multi-homeowners from 0.6~3.2% to 1.2~6.0%) will take effect from June 1 this year. The capital gains tax surcharge rate for multi-homeowners in regulated areas will be raised from 10~20 percentage points to 20~30 percentage points. The capital gains tax rates on houses held for less than two years and on cooperative member move-in rights and pre-sale rights will be increased to 60~70%, respectively.
Additionally, financial authorities plan to continuously monitor financial companies' compliance with loan regulations and strictly respond to market disruption activities through illicit loans.
Currently, financial authorities apply the Debt Service Ratio (DSR) on a borrower basis for high-income individuals with high-value unsecured loans (borrowers with annual income over 80 million KRW and loans exceeding 100 million KRW), and impose regulations such as prohibiting house purchases within one year when handling unsecured loans exceeding 100 million KRW.
Furthermore, loans found to violate regulations will be recalled, and lending will be prohibited for the next three years.
The National Tax Service will continue activities to block tax evasion related to real estate transactions.
Using suspected tax evasion data from the Ministry of Land and internal taxation information, the sources of funds for high-priced home buyers, high-value jeonse tenants, and multi-home buyers will be continuously analyzed, and new types of tax evasion will be actively identified.
The police will focus on cracking down on illegal activities in the apartment pre-sale market. Habitual offenders such as brokers will be relentlessly tracked and arrested for prosecution, and criminal proceeds will be thoroughly traced for confiscation and recovery.
In this regard, Lim Jae-hyun, Director of the Taxation Office, stated, "We are not considering easing or postponing the capital gains tax surcharge," adding, "Since capital gains tax and comprehensive real estate tax will increase significantly from June 1, it is expected that many properties will be put on the market by multi-homeowners."
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