Housing Transaction Reporting System starting within this year

“The Housing Transaction Reporting System” will be established as early as this year, and those who have purchased a house in most of the Seoul metropolitan area, including Seoul, should report the actual value of the house to the government.

In addition, those who own three houses will face the maximum tax rate of 75 percent (82.5 percent, with local taxes included) from the current 36 percent on capital gains they accrued through the sale of properties, where most of these gains will be absorbed as tax revenue.

Moreover, the government will provide more houses by designating 12-13 new sites for new towns in northern Seoul next month.

If the primary measures fail to stabilize the property market, the government will introduce intensive public land ownership, such as the housing trading permission system, banning re-sale of rights to buy newly-built apartments, redemption of capital gains from re-building apartments, and actively examine the removal of the tax exemption system for single-home owners. Kim Jin-pyo, deputy prime minister and minister of finance and economy, held a meeting of economic ministers October 29, at Bank Hall, Myongdong, Seoul, and announced the property market stabilization package.

Before this, President Roh Moo-hyun presided over the third economic meeting in Blue House and said, “The government must have a strong will to try to collect all the capital gains from property speculations that exceeded interest rates by imposing property holding taxes.

“According to regions, even single-home owners might be subjected to a long-range plan for stabilizing the property market, if it is used for speculation,” asserted President Roh.

The government planned that those who transact housing in speculation-prone zones should report their transactions to the local government upon finalizing contracts and if they violate this, negligence fines will be imposed.

The government has also decided to lower the loan-to-value ratio from 50 percent to 40 percent in speculation-prone areas, starting from this November, and it will ban re-sale of rights to buy newly-built multi-complex apartments with more than 20 households.

The ratio of preferential supply of apartments, which cover less than 25.7-pyong and are privately built within the speculation-prone areas, will rise from the current 50 percent to 75 percent for those who have not owned a house for more than five years.

With this, the government plans to start an anti-speculation measures. On October 29, Lee Yong-sub, administrator of the NTS said that with the announcement of real estate speculation patterns next week, there will be another announcement during November for the investigation of speculative real estate investment.

The National Tax Service declared that within next month, it would raise standard prices of the apartments in speculation-prone areas and six metro-cities up to prices close to the actual market prices.