Temporary Two-Homeowners Due to Inheritance or Marriage Also Eligible for Reconstruction Levy Reduction

Proposed Amendment to the 'Reconstruction Excess Profit Recovery Act'... Legislative Notice Until the 19th
Reconstruction Burden Reduction Rate Up to 50% Depending on Housing Ownership Period

An apartment reconstruction site in Seoul
[Image source=Yonhap News]

[Asia Economy Reporter Kim Junran] A plan to reduce the surcharge for temporary two-homeowners due to unavoidable reasons such as inheritance or marriage is being promoted.

On the 16th, according to the National Assembly and the Ministry of Land, Infrastructure and Transport, Kim Jeongjae, a member of the People Power Party, recently introduced the "Amendment to the Act on the Recovery of Excessive Profits from Reconstruction" containing such content as the main sponsor. This amendment is a follow-up measure to the "Rationalization Plan for Reconstruction Surcharge" announced by the Ministry of Land in September and serves as a legal basis for implementing the plan. After the legislative notice period ends on the 19th of this month, it is expected to be actively discussed in the National Assembly.

Previously, the Ministry of Land's announcement stated that the surcharge reduction would only apply to long-term holders of one house for more than six years. The notable point in this amendment is that it broadens the interpretation of the one-householder category and specifies the applicable targets. In addition to the house subject to the reconstruction project, houses held due to unavoidable reasons such as inheritance or marriage are excluded from the count of owned houses and considered as one householder.

Also, during the reconstruction project period, if another house is held for residence or a low-priced house is owned, the surcharge will be reduced by up to 50% as a one-householder. However, this is on the condition that the relevant house is disposed of within a certain period. Specific disposal periods and other details will be determined through subordinate legislation.

The reconstruction surcharge reduction rate varies depending on the housing ownership period. If the house subject to reconstruction has been held for more than six years counted backward from the completion date, the surcharge will be reduced by 10%. The reduction rate increases by 10% for each additional year, up to a maximum of 50% for those who have held the house for more than ten years.

Additionally, elderly persons aged 60 or older who are one-householders will be allowed to defer payment of the surcharge until the disposal of the reconstruction house through inheritance, donation, or transfer, on the condition of providing collateral.