Lim Kwanghyun Says Heavier Capital Gains Tax on Multi-Homeowners Could Boost Taxes by Up to 2.7 Times

Simulation of Tax Burden Released via Social Media
"Consistency Is Crucial in Tax Policy"

Lim Kwanghyun, Commissioner of the National Tax Service, said on the 3rd, "If the temporary suspension of the heavier capital gains tax on multi-homeowners expires, in the case of a capital gain of 1 billion won, the tax burden for owners of two homes will surge by up to 2.3 times, and for those who own three or more homes it will surge by up to 2.7 times."

On this day, Commissioner Lim wrote on Facebook, "I ran a simulation to see how much the tax burden would increase if the temporary suspension of the heavier capital gains tax on multi-homeowners expires," making these remarks. With the end of the temporary suspension of the heavier capital gains tax on multi-homeowners approaching, the head of the tax authority directly mentioned the scale of the tax increase and stressed the need to normalize the tax system.

Lim Gwanghyun, Commissioner of the National Tax Service. The Asia Business Daily DB

Commissioner Lim pointed out, "Looking at the cases around 2021, when the current heavier taxation rules were implemented, the number of housing transfers by multi-homeowners in designated adjustment areas surged from 39,000 cases in 2019 to 71,000 cases at the time of the announcement in 2020, and then to 115,000 cases in 2021, when the rules were implemented," adding, "Just think how disheartened many people must have been in 2022, when the policy was temporarily suspended, after they had trusted the government's policy and made what they believed were rational decisions."

Commissioner Lim also emphasized the importance of policy credibility. He said, "For government policies, especially tax policies, consistency is crucial. Normalization is now underway," and added, "As soon as the detailed measures regarding the end of the temporary suspension of the heavier capital gains tax are finalized and announced, the National Tax Service will operate a 'dedicated filing and consultation service for taxpayers subject to heavier capital gains tax' in designated adjustment areas until the suspension ends."

Facebook post by Lim Kwanghyun, Commissioner of the National Tax Service.

Meanwhile, on the same day, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance Koo Yooncheol also reaffirmed the policy, saying, "To restore policy credibility and normalize the market, we plan to end the temporary suspension of the heavier capital gains tax on multi-homeowners," and confirmed that the government will terminate, as scheduled, the system that temporarily suspends the heavier capital gains tax on multi-homeowners when it expires on May 9.