Additional Lift of the Designation of Speculation-prone Area

The government announced on December 21 that it would convene a “Council on real estate prices stabilization (Head: Kim Gwang-lim, vice minister of the Ministry of Finance and Economy)” on December 23 at the Bank Hall, Myong-dong, Jung-gu, Seoul to lift the designation of speculation-prone area from parts of the Seoul metropolitan areas and Chungcheong Province.

Twelve delegates will attend the meeting from both public and private sectors, including the National Tax Service, Korea National Council of Consumer Organizations, Korea Chamber of Commerce and Industry, and the Ministries of Finance and Economy, Construction and Transportation, Government Administration and Home Affairs. They will decide those areas which will be free of the designation of speculation-prone area, considering the recent increased rates of local housing prices and the possibility of speculation.

Currently, 10 areas are thought to be the candidates, including Chungrang-gu of Seoul, Bupyeong-gu and Namdong-gu of Incheon, Euiwang and Gunpo of Gyeonggi Province, Seo-gu, Yuseong-gu, Daedoek-gu of Daejeon and Cheonan, Asan of Chungnam Province, which all passed the criteria of lifting the designation.

A high-ranking official at the Ministry of Finance and Economy said that the Cheong Wa Dae also recommended to draw up measures to revitalize house transactions among those who really need a house, and added that it is highly likely that all 10 candidate areas would become free of the designation and the cancellation of the designation would spread to other areas, including those packed with small-sized apartments in Seoul.

The areas selected in the meeting will be publicized in official gazettes and imposed inheritance tax according to NTS standard three or four days later.

The government canceled the designation from seven areas—Buk-gu and Haewundae-gu of Busan, Seo-gu, Jung-gu, Suseong-gu of Daegu, Chuncheon of Gangwon Province and Yangsan of Gyeongnam Province—on August 20 for the first time ever. There are 50 areas currently designated as a speculation-prone area.

Chi-Young Shin higgledy@donga.com