Keeping Real Estate Speculation from Raising its Ugly Head

With signs of real estate speculation rising again in certain regions, the government will readjust speculation districts in the Seoul metropolitan area and Chungcheong region on February 24.

The government will hold a Real Estate Price Stabilization Council on Sunday, which will be headed by Vice Minister of Finance and Economy Kim Gwang-lim, at the Banker’s Building in Seoul on February 24. The council will discuss the readjustment of housing and land speculation areas, according to an announcement by the ministries of Finance and Economy, and Construction and Transportation on Sunday.

When it comes to the housing speculation zones, around 10 regions that are qualified for being removed from the ban, including Cheonan-si, Asan-si and Gongju-si in Chungnam and Gwacheon-si in Gyeonggi, will go though a deliberation process. In terms of land speculation areas, some 10 regions, including Yeongi-gun in Chungnam, whose land price soared 23 percent last year, Wonju-si in Gangwon, Yeoncheon-gun in Gyeonggi, and Gimcheon-si in Gyeongbuk meet the criteria of speculation zones.

A capital gains tax in speculation zones is levied based on actual transaction prices. A total of 71 regions, 40 land areas and 31 houses have been designated as speculation zones. Sellers in regions free of regulation will be relieved of their tax burden since a capital gains tax will be imposed based on their standard market price.

Chi-Young Shin higgledy@donga.com