Hong Nam-ki: "Tax Disadvantages for Participants in the 2·4 Plan Public Purchase Will Be Resolved... Improvement Plan to Be Prepared" (Update)

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Kim Hyunjung] The government is preparing tax improvement measures such as acquisition tax reductions and comprehensive real estate tax exemptions to ensure that landowners and project implementers participating in the 2·4 supply plan projects do not face tax disadvantages.

On the 17th, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, held the 24th Real Estate Market Inspection Meeting with related ministers at the Government Seoul Office and said, "Unlike typical general maintenance projects, many projects under the 2·4 plan proceed in the form of 'public purchase,' where the public sector acquires housing during the implementation process," adding, "We will resolve any potential tax disadvantages for landowners and project implementers arising during this process."

For landowners participating in public direct implementation projects and urban complex projects under the 2·4 plan, acquisition tax will be reduced to the current general maintenance project level when acquiring completed housing after land contribution to the public, and project implementers will also be exempted from comprehensive real estate tax on all real estate of the acquired landowners.

Tax incentives will also be strengthened to the level of general maintenance projects to revitalize small-scale housing maintenance projects (under 200 households and less than 10,000㎡ based on reconstruction standards).

Landowners participating in future projects will be eligible for capital gains tax exemption on one household one residence for one household one occupancy right, and corporate tax and value-added tax will be exempted on income and sales of small maintenance associations generated during the sales process.

Deputy Prime Minister Hong said, "Detailed contents by project stage and type will be distributed by the Ministry of Land, Infrastructure and Transport after confirmation through discussions in this meeting body."

He anticipated that the government's supply plan effects will be felt in earnest from 2022 onward. He explained, "With the expansion of completions after May, it will be possible to secure a normal level of move-in volume by the end of the year, and the supply expansion effect will be more tangible after 2022." The government expects to secure 460,000 households nationwide, including 83,000 households in Seoul, by the end of this year. Furthermore, the plan is to secure 81,000 households in Seoul and 489,000 households nationwide next year. Deputy Prime Minister Hong said, "The government will prioritize 'expanding housing supply' to resolve uncertainties in the real estate market and control market expectations," adding, "We will consistently pursue policy directions of protecting actual demand and strictly cracking down on market disturbances."