Minister Choi Considers Capital Gains Tax on Single-Home Owner

Construction-Transportation Minister Choi Jong-chan said on November 5 that there is both a gradual and a long-term need to consider taxation on capital gains generated even when a single home owner sells his or her house.

Choi said in a speech arranged by the National Strategy Institute in Myongdong Bank Hall on Wednesday that the biggest obstacle in determining the real transaction prices is the exemption of capital gains tax for a single home owner.

He added that in order to satisfy this need, it may be necessary to exempt capital gains taxes for people who have lived in their house for a certain period of time and have gained less than a certain amount from the housing transaction, while not having most regular citizens be subjected to the imposition of tax and feel uncomfortable about it. Moreover, Choi pointed out that it is problematic to apply this policy indiscriminately since people in Seoul could have capital gains of hundreds of million won just by selling one house, while in rural areas, people may not have any gains even selling two or three houses.

In relation to the governmental policy to impose a heavy property holding tax, Choi said, “This policy has not been realized due to the strong opposition from taxpayers and economic problems, but as a whole, it is the way the government should pursue since it is helpful to utilize land resources and realize taxation justice.”

Saying that he would find ways to redeem the capital gains from the reconstruction of apartments, Choi also reaffirmed his strong will to introduce the policy of the reconstruction gains redemption, which was suggested as the second phase plan of the anti-housing speculation package on October 29.

Jae-Seong Hwang jsonhng@donga.com