▲ Finance Minister Koo Yun-cheol (Yonhap)

govt-property tax

Gov't to announce measures to ease impact of capital gains tax on multiple-home owners: finance chief

By Kim Han-joo

SEOUL, Feb. 5 (Yonhap) -- The government will announce supplementary measures next week to mitigate the potential impact of its plan to end an exemption from heavy capital gains tax for owners of multiple homes, Finance Minister Koo Yun-cheol said Thursday.

The temporary exemption will be terminated as planned on May 9, President Lee Jae Myung has warned, stressing the need to stabilize housing prices and curb real estate speculation. Lee has argued that soaring housing costs are forcing young people to abandon plans for marriage and childbirth.

"We will end the exemption from capital gains tax for owners of multiple homes, while announcing supplementary measures next week to minimize inconvenience to the public, including those who own rental properties," Koo said in a post on X, formerly known as Twitter.

The remarks are widely interpreted as an effort to address the practical difficulty of selling homes that are currently occupied by tenants, as well as to strengthen protection for renters.

Many rental properties in South Korea are leased under the jeonse system, in which tenants provide a large lump-sum deposit that is fully returned at the end of a minimum two-year lease.

The government has said it is considering granting a grace period of up to three months for properties in Seoul's Gangnam district and Yongsan, and up to six months for newly designated speculative zones. The grace periods would apply to cases in which final payments are made or ownership registration is completed within those timeframes.

Currently, capital gains taxes on real estate sales range from 6 to 45 percent. Owners of two homes in designated speculative zones face an additional 20 percentage points, while those owning three homes are subject to a 30 percentage-point surcharge on top of the base rate.

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