[Asia Economy Sejong=Reporter Kwon Haeyoung] The Moon Jae-in administration has clearly stated that it has no intention of implementing the temporary exclusion of capital gains tax surcharges on multiple homeowners, which the Presidential Transition Committee requested to be enforced from April.
The Ministry of Economy and Finance issued a press release on the 11th, stating, "It is desirable to implement the temporary exclusion of capital gains tax surcharges on multiple homeowners immediately after the new government takes office."
Accordingly, the implementation timing of this measure is expected to be after May 10, when the new government takes office, rather than this month. Earlier, Choi Sang-mok, the economic division chief of the Transition Committee, requested the temporary exclusion of capital gains tax surcharges on multiple homeowners to be implemented in April during a briefing on the 31st of last month, stating, "If the current government does not take action, we will revise the enforcement decree immediately after the new government takes office so that the exclusion applies for one year starting from the day after May 10, the inauguration day."
An official from the Ministry of Economy and Finance explained, "The temporary exclusion of capital gains tax surcharges on multiple homeowners should be reviewed and promoted in connection with other policies under a comprehensive real estate policy roadmap to be prepared under the new government's policy direction after its inauguration," adding, "It is not desirable to change major policy directions during the current government's term, which could cause fairness issues for non-homeowners, single-homeowners, and existing home sellers." The official further stated, "The current government will focus on thoroughly implementing market stabilization measures such as supply expansion during this transitional period while creating conditions for the new government to explore changes in real estate policy directions."
The government also announced its plan to provide tax benefits, including relief from comprehensive real estate tax burdens, to temporary two-homeowners due to moving or inheritance, treating them the same as single-homeowners.
Previously, in February, the Ministry of Economy and Finance abolished the application of multiple homeowner surcharge rates for temporary two-homeowners due to inherited houses. However, such benefits were not extended to temporary two-homeowners due to other reasons such as moving. The government now plans to abolish the surcharge rates for all temporary two-homeowners and apply the same tax benefits limited to single-homeowners.
Accordingly, temporary two-homeowners due to moving or inheritance will also be eligible for benefits available only to single-homeowners, such as ▲a basic deduction of 1.1 billion KRW ▲up to 80% tax credit for elderly or long-term holders ▲special provisions for jointly owned single homes by couples. The government’s measures announced at the end of last month to ease the comprehensive real estate tax burden caused by the sharp rise in official property prices, including ▲applying the 2021 official property price for single-homeowners ▲payment deferral benefits for the elderly, will also apply.
An official from the Ministry of Economy and Finance said, "This is a continuation of the consistent policy direction to protect actual demand," adding, "However, granting single-homeowner benefits to temporary two-homeowners requires legal amendments and additional legislative measures."
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