Deduction of Transfer Tax Burden for High-Priced House

If one family owns one house of below 45 pyong even though its price is over 0.6 billion won, a burden of a transfer income tax will be reduced over the original bill of government made for `10·11 housing market stability measure`.

The government and three political parties of Hannara party, Minju party and the united liberal democrats held `a meeting for public welfare measure` participated by ministers and presidents of policy planning committee on October 24. They agreed to reduce the burden of transfer tax for the long-term owners of `high priced houses`.

The government and major political parties decided that the transfer tax would be applied to remove the property speculation in the meeting and agreed that detailed measures would be discussed by a standing committee.

Accordingly, the special reduction range of long-term owners of over 3 years will be extended by 5∼20% over the existing government bill.

The government bill said that the transfer tax will be levied at actual dealing rate to high-priced houses of over 0.6 billion won. However, in terms of the long-term owners, if owned for 3~5 years, 10% of the transfer gain will be specially deducted and if owned for over 10 years, 30% will be deducted.

Hanara Party determined to promote the reduction measures as follows; 15% deduction of transfer gain between 3 and 5 years, △ 50% deduction between 5 and 10 years and △ full exemption for over 10 years for people who own the house of over 45 pyong out of high priced houses of over 0.6 billion won.

The MOFE official said, “We cannot object to the extension of special deduction range of the National Assembly. However, if excessively extended, the speculation restriction effect can be lost. The big deduction of tax exemption and transfer tax cannot be executed.”

Besides, Son Yeong-Rae, Commissioner of the NTS said in a social gathering held by `21C businessman club` in Lotte Hotel, Sogong-dong Seoul, “We will detect the fund source by pursuing accounts of families as well as a said person for a short-term transactors who sold the apartment within 1 year again after buying it.”

National Tax Service has investigated the funds source for who is suspected for a real property speculation and has unsure source of the property purchase fund.