Disclosure of Second Home Activation Acquisition Price Application Areas
Excluding 6 Locations Including Dong-gu, Busan; Nam-gu, Daegu; and Gapyeong, Gyeonggi
Starting this year, existing single-homeowners who newly purchase a house with a publicly announced price of 400 million KRW or less in nationwide population decline areas will be able to receive single-homeowner special benefits on housing ownership and transaction taxes.
On the 15th, the Ministry of Economy and Finance disclosed the promotion plan for the "Population Decline Area Revival 3-Project" at an emergency economic ministers' meeting held at the Government Seoul Office, chaired by Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok.
First, as a "Second Home Activation Plan" to revive population decline areas, the government allowed existing single-homeowners who newly acquire one house with a publicly announced price of 400 million KRW or less in population decline areas to receive single-homeowner special benefits on property tax, comprehensive real estate tax, capital gains tax, and others.
The second home special benefit areas exclude the metropolitan area and large cities with concerns about real estate speculation among the 89 nationwide population decline areas. Some border areas such as Ganghwa-gun and Ongjin-gun in Incheon, Yeoncheon-gun in Gyeonggi Province, and Gunwi-gun in Daegu metropolitan city are included. Accordingly, 83 areas except for six places including Dong-gu, Seo-gu, and Yeongdo-gu in Busan, Nam-gu and Seo-gu in Daegu, and Gapyeong-gun in Gyeonggi Province will receive the second home special benefits.
For example, if Mr. A, who lives in a house with a publicly announced price of 900 million KRW (acquisition price 900 million KRW, sale price 1.3 billion KRW) in the metropolitan area, purchases a house with a publicly announced price of 400 million KRW in B-gun, Chungbuk, a population decline area, in May this year, Mr. A can be recognized as a single homeowner. Assuming the maximum limits for elderly and long-term ownership, Mr. A's property tax burden will decrease from 3.05 million KRW to 2.11 million KRW, comprehensive real estate tax burden from 750,000 KRW to 40,000 KRW, and capital gains tax burden from 85.51 million KRW to 220,000 KRW, respectively.
The Ministry of Economy and Finance stated, "As the burden of additional housing purchases in population decline areas decreases, it is expected to contribute to revitalizing housing transactions and expanding the resident population in those areas," adding, "We will promptly proceed with related law and enforcement decree amendments to apply the measures from the 2024 tax year at the earliest." The government plans to apply the special benefits from this year's tax year through amendments to the Restriction of Special Taxation Act and the Local Tax Act enforcement decree.
Along with this, to revitalize real estate in population decline areas, the government decided to first designate and promote seven cities/counties and ten sites as "small-scale tourist complexes."
Small-scale tourist complexes relax the designation criteria for tourist complexes from 500,000㎡ or more to 50,000?300,000㎡, creating multiple mini tourist complexes. Selected sites include Jecheon Uirimji tourism resort development, Cheongpung Lakeside Extreme Park creation, Danyang Station tourism facility development, Siru Island tourism leisure town development, Gochang comprehensive theme park creation, Goheung-gun Sun Island development, Yeongju City Yeongju Dam complex resort development, Hadong-gun education convergence-type tourist complex development, Namhae-gun Daejipo wellness hot spring complex, and Namhae Lighting Island creation. A total of 1.4 trillion KRW will be invested in these ten mini tourist complexes.
To attract foreigners, the number of regional specialized visa participation areas will be expanded from 28 to 66, and the quota will increase from 1,500 to 3,291. The Ministry of Economy and Finance explained, "The purpose is to increase regional industrial manpower and resident population through expanding regional specialized visa participation areas and quotas tailored to regional demand and characteristics."
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