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1st time home buyer to get 5-year waiver on transfer tax

1st time home buyer to get 5-year waiver on transfer tax

Posted April. 02, 2013 06:31,   

한국어

The transfer tax will be waived for five years if one acquires a mid-size home worth under 900 million won (808,260 U.S. dollars) from a household owning one home by year`s end. Also to be exempted is an acquisition tax for a first-time home buyer by the end of the year, and he or she can get a mortgage loan of up to 70 percent of the home`s value.

The Land, Infrastructure and Transportation Ministry, the Strategy and Finance Ministry and the Financial Services Commission announced "the comprehensive measures for the real estate market" Monday through the meeting held among the ruling Saenuri Party, the government and the presidential office.

The government lifted a transfer tax for five years from the time of acquisition if a buyer purchases a home worth less than 900 million won from a household that owns one home or a temporary two-home owning household. The home must also be less than 85 square meters in exclusive use space. If one purchases a new or unsold home worth less than 900 million won, the transfer tax will be exempt. Even multiple house owners can get the same tax benefit if they buy one under the same condition.

This is the first time for the government to exempt the transfer tax on existing houses, not unsold or new ones. The intent is apparently to encourage those available to buy homes and also give the "house poor," or those owning housing units who struggle to survive to make payments, the opportunity to dispose of their homes.

If a household with an annual income of 60 million won (53,880 dollars) buys its first home of less than 85 square meters in exclusive use space, the acquisition tax will be waived and a lower loan interest rate of 3.3 to 3.5 percent will be offered, down from 3.8 percent.

The government will also reduce the annual number of public housing units from 70,000 to 20,000 to alleviate the supply glut. The Bogeumjari project, a key pledge of the previous Lee Myung-bak administration for low-income households, will be downsized and no further districts will be designated for construction. If deemed safe, remodeling and adding stories to apartment buildings more than 15 years old will be allowed, which is likely to lead to reconstruction projects at Bundang of Seongnam and Il The transfer tax will be waived for five years if one acquires a mid-size home worth under 900 million won (808,260 U.S. dollars) from a household owning one home by year`s end. Also to be exempted is an acquisition tax for a first-time home buyer by the end of the year, and he or she can get a mortgage loan of up to 70 percent of the home`s value.

The Land, Infrastructure and Transportation Ministry, the Strategy and Finance Ministry and the Financial Services Commission announced "the comprehensive measures for the real estate market" Monday after the ruling Saenuri Party, the government and the presidential office held a meeting on real estate policy.

The government lifted a transfer tax for five years from the time of acquisition if a buyer purchases a home worth less than 900 million won from a household that owns one home or a temporary two-home owning household. The home must also be less than 85 square meters in exclusive use space. If one purchases a new or unsold home worth less than 900 million won, the transfer tax will be exempt. Even multiple house owners can get the same tax benefit if they buy one under the same condition.

This is the first time for the government to exempt the transfer tax on existing houses, not unsold or new ones. The intent is apparently to encourage those available to buy homes and also give the "house poor," or those owning housing units who struggle to survive to make payments, the opportunity to dispose of their homes.

If a household with an annual income of 60 million won (53,880 dollars) buys its first home of less than 85 square meters in exclusive use space, the acquisition tax will be waived and a lower loan interest rate of 3.3 to 3.5 percent will be offered, down from 3.8 percent.

The government will also reduce the annual number of public housing units from 70,000 to 20,000 to alleviate the supply glut. The Bogeumjari project, a key pledge of the previous Lee Myung-bak administration for low-income households, will be downsized and no further districts will be designated for construction. If deemed safe, remodeling and adding stories to apartment buildings more than 15 years old will be allowed, which is likely to lead to reconstruction projects at Bundang of Seongnam and Ilsan of Goyang in Gyeonggi Province.san of Goyang in Gyeonggi Province.



imsoo@donga.com