No Transfer Tax From Next Year

Starting next year, the conditions for Transfer Tax exemption eases for elderly people aged 60 or over with a family and one house living in the metropolitan area.

Also, for houses smaller than 45 pyong, a standard market price of 600 million won will be added to the leased houses, which are exempt from paying Transfer Tax.

The government announced yesterday that it is putting this income taxation plan from next January as the income tax bill was passed by the National Assembly on December 29.

According to the government, an elderly person aged 60 years or over who owns a house in Seoul, Gwacheon and the five new towns in the metropolitan area, when trying to receive reverse mortgage with the house he owns as collateral, will not need to pay the Transfer Tax even if he hasn’t lived there for two years.

Furthermore, even if the elderly person lives with his children, making one family and two houses, if he receives reverse mortgage with just one house, the exemption rule applies.

According to the current law, if one family-one house who owns a house in Seoul, Gwacheon and the five new towns wants to be exempt from Transfer Tax, he has to hold on to it for more than three years and has to live in it for more than two years. Also if a child lives with his or her parents, making it one family-two houses, he or she has to sell a house before two years to be exempt.

Elderly can be exempt no matter how long he or she has lived or owned the house.

The government decided to add a house of less than 45 pyong and standard market price of less than 600 million won to the one family-three houses Transfer Tax exemption to promote the supply of long-term lease houses.

Until now, a leaser who owns five houses smaller than 25.7 pyeong and a standard market price of less than 300 million won house who leases them for more than five years can be exempt.

Chang-Won Kim changkim@donga.com