[Weekly Outlook] Exclusion of Capital Gains Tax Surcharge for Multi-Homeowners to Take Effect from the 10th... Launch of Yoon Administration's New Economic Team

President-elect Yoon Suk-yeol listens to the report on the activities of the transition committee by Secretary Chu Kyung-ho at the disbandment ceremony of the Presidential Transition Committee held in Samcheong-dong, Jongno-gu, Seoul, on the afternoon of the 6th. Photo by Transition Committee Press Corps

[Asia Economy Sejong=Reporter Son Seonhee] On the 10th, coinciding with the official inauguration of President-elect Yoon Seok-yeol, the new economic team led by Deputy Prime Minister and Minister of Economy and Finance nominee Choo Kyung-ho will be fully operational. Along with the launch of the new government, one of the representative real estate pledges, the "one-year exclusion of capital gains tax surcharge for multi-homeowners," will be implemented.

The Ministry of Economy and Finance plans to proceed with the outgoing procedure for Deputy Prime Minister Hong Nam-ki and the inauguration procedure for the new Deputy Prime Minister nominee Choo next week, in line with the new government's launch. The first institutional change with the regime change is the one-year exclusion of the capital gains tax surcharge for multi-homeowners. Once the system is implemented, multi-homeowners who have held their homes for more than two years and make the final payment or register the transfer from the 10th onward will be eligible for the capital gains tax surcharge exclusion benefit (applying the basic tax rate of up to 45%).

If the home has been held for more than three years, a special deduction for long-term holding can provide a deduction of up to 30% of the capital gains. If the final payment is completed before June 1 of this year, the tax base date for property tax, the burden of holding taxes such as comprehensive real estate tax can also be reduced.

On the 11th, Statistics Korea will announce the employment trends for April. There is interest in whether the strong employment recovery trend that continued in the first quarter also persisted in April. The increase in the number of employed persons this year was 1,135,000 in January, 1,037,000 in February, and 831,000 in March.

The Bank of Korea will announce the "March balance of payments (provisional)" results on the 10th. Korea's current account balance has maintained a surplus trend for 22 consecutive months through February since May 2020. However, the surplus amount in February (6.42 billion USD) decreased compared to the same month last year (8.06 billion USD) due to rising prices of oil and raw material imports. Given that prices of raw materials and grains have not fallen due to the Ukraine crisis and global supply bottlenecks, attention is focused on whether the March current account surplus has further decreased.

On the 11th, the "Financial Market Trends for April" will be announced. As of the end of March, the outstanding household loans at banks (1,059 trillion KRW) decreased by 1 trillion KRW compared to the end of February, marking the fourth consecutive month of decline since December last year. This is the first time since the Bank of Korea began compiling related statistical flash reports in 2004 that household loans in the banking sector have decreased for four consecutive months. Considering trends in household loans at the five major banks, it is expected that the downward trend in household loans continued in April as well.