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Plan to Raise Housing Supply, Boost Construction

Posted August. 22, 2008 08:15,   


An owner of one home will be exempt from double transfer tax when buying another home priced under 300 million won in Busan, Daegu, Gwangju, Ulsan, and Daejeon and then selling it.

A person who buys an apartment larger than 85 square meters in Seoul and the suburbs of Gwacheon, Seongnam and Goyang can sell it in three years.

The government and the ruling Grand National Party yesterday announced a plan to raise the housing supply and boost the construction industry after a council meeting.

Under the plan, a person owning two properties must pay a general tax of between nine and 36 percent if they sell a home worth less than 300 million won in large cities except for Seoul as early as October.

Current law requires an owner of two homes to pay the general tax only if he or she sells a home worth priced under 100 million won, and a tax of 50 percent if the home price is more than 100 million won.

For example, if a person who owns a house worth 600 million won in Seoul and a house worth 300 million in Busan sells both units to earn a profit of 100 million won each, the transfer tax will fall from 50 million won to 24 million won.

If those registered as landlords with the National Tax Service and provincial governments rent out more than one home smaller than 149 square meters and costing under 300 million won in a non-metropolitan area for more than seven years, they are exempt from the transfer tax as well as the comprehensive real estate tax.

If an owner of a home in Seoul worth 500 million won and another in Busan worth 300 million (under 149 square meters) register his or herself as a landlord and rent a home in Busan for more than seven years, he or she is exempt from the comprehensive real estate tax and can pay transfer tax at the general tax rate.

Buying more than five homes each under 85 square meters have earned a tax credit only after they rent out for more than 10 years.

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