President Lee's message on SNS on the 9th
"If registered rental multiple-home properties come onto the market, they will supply hundreds of thousands of units"
President Lee Jaemyung is speaking at a senior secretaries' meeting held at the Yeomin-gwan of the Blue House on the 5th. Yonhap News
President Lee Jaemyung said on the 9th that registered rental housing currently enjoys preferential treatment in capital gains tax, and expressed the view that it would be appropriate to align it fairly with general rental housing.
On the same day, President Lee wrote on his social network service (SNS), "Around 300,000 registered rental housing units in Seoul (including about 50,000 apartments) receive preferential treatment in the form of reductions in acquisition tax, property tax, and comprehensive real estate holding tax, and permanent exemption from the heavier capital gains tax applied to multiple-home owners," adding, "Once the mandatory rental period ends, the reductions in property tax and comprehensive real estate holding tax disappear, but the preferential treatment of 'exemption from the heavier capital gains tax on multiple-home owners' is set to continue."
President Lee explained that even among multiple-home owners, only those who are registered rental business operators receive tax benefits permanently. He went on, "There is also the opinion that there is no need to grant permanent preferential treatment just because a property was once registered as rental housing," and elaborated, "The idea is that compensation for mandatory rental obligations should be sufficient with reductions in acquisition, holding, and property taxes during the rental period, plus exemption from the heavier capital gains tax for a certain period after the end of the rental."
He then asked rhetorically, "We should give them an opportunity to dispose of their properties, but after the rental period ends, shouldn't all the various tax rules applied to registered rental housing be the same as those for general rental housing in order to be fair?" He also hinted at the view that, in a capitalist society, there is nothing wrong with living in an expensive home or owning multiple homes, but those owners should bear partial responsibility for the "social problems that arise as a result."
President Lee further argued, "If registered rental multiple-home properties, whose mandatory rental period and a certain period of exemption from the heavier capital gains tax have expired, come onto the market like general multiple-home properties, there will be a supply effect of several hundred thousand units," adding, "Now that there are alternative investment vehicles, it is time to change our thinking."
In relation to this, President Lee suggested, "Since abolishing the preferential treatment of exempting registered rental housing from the heavier capital gains tax immediately would impose too great a burden, there could be options such as eliminating it after a certain period has passed or phasing it out gradually," adding, "There is also an opinion that the scope should be limited to apartments only."
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