Guri Mayor Baek Kyung-hyun Proposes Exemption of Capital Gains Tax on Land for Public Projects

Policy Meeting Between Gyeonggi Province Governor and Mayors
Proposal to Alleviate Tax Burden on Original Residents in Guri Topyeong 2 Public Housing District Development Project

Guri City, Gyeonggi Province (Mayor Baek Kyung-hyun) announced on the 12th that it proposed an amendment to the Restriction of Special Taxation Act to exempt capital gains tax on land acquired for public projects during a policy meeting between the Governor of Gyeonggi Province and mayors and county heads held at the Gyeonggi Provincial Government on the 11th.

Gyeonggi Province Governor Kim Dong-yeon (left) and Guri Mayor Baek Kyung-hyun are taking a commemorative photo at the policy meeting between the Gyeonggi Province Governor and mayors and county heads held at the Gyeonggi Provincial Government on the 11th. Provided by Guri City

According to the city, land acquired under the 'Land Compensation Act' receives a capital gains tax reduction of 10% for cash compensation and 15% for bond compensation, with limits set at 100 million KRW annually and a maximum of 200 million KRW over five years.

This has led to strong resident opposition, as it is practically impossible for original landowners to purchase substitute land nearby after receiving compensation, causing delays in the projects.

Accordingly, Mayor Baek Kyung-hyun proposed at the meeting to apply the capital gains tax exemption clause as before the 1989 amendment of the 'Tax Reduction Regulation Act,' fully exempting capital gains tax for public projects. He also requested cooperation from 31 cities and counties to help expedite the passage of the amendment to Article 77 of the 'Restriction of Special Taxation Act,' which aims to ease capital gains tax on land for public projects, in the National Assembly.

Mayor Baek stated, "The proposal to exempt capital gains tax through the amendment of the Restriction of Special Taxation Act is intended to protect the property rights of citizens cooperating with public projects while establishing a fair and reasonable compensation system. This will enable the swift and smooth progress of public housing district development projects."

Meanwhile, Topyeong 2 District was announced by the Ministry of Land, Infrastructure and Transport in November last year as a new housing site candidate covering approximately 2.92 million square meters (about 880,000 pyeong) as a follow-up measure to the 'Housing Supply Activation Plan.'