South Korea to tighten property market rules, hike tax on multiple home owners

Real estate taxes that kick in on properties valued over 600 million won ($499,488) for multiple home owners will be increased, while capital gains tax rates will also be raised, finance minister Hong Nam-ki said at a policy meeting.
Residential apartment buildings stand in this aerial photograph taken above Gimpo, South Korea, on Friday, July 10, 2020. South Korea’s government is preparing new regulations to curb excessive house price gains that have fueled public discontent over inequality and property speculation. Photographer: SeongJoon Cho/Bloomberg(Bloomberg Photo)
Residential apartment buildings stand in this aerial photograph taken above Gimpo, South Korea, on Friday, July 10, 2020. South Korea’s government is preparing new regulations to curb excessive house price gains that have fueled public discontent over inequality and property speculation. Photographer: SeongJoon Cho/Bloomberg(Bloomberg Photo)
Updated on Jul 10, 2020 12:30 PM IST
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Seoul | ByReuters| Posted by: Harshit Sabarwal

South Korea said on Friday it will further tighten property market rules and impose heavier taxes on multiple homeowners as more than 20 rounds of cooling measures introduced in the past three years failed to calm runaway home prices.

Real estate taxes that kick in on properties valued over 600 million won ($499,488) for multiple home owners will be increased, while capital gains tax rates will also be raised, finance minister Hong Nam-ki said at a policy meeting.

Hong is expected to give details including exact tax rates at a briefing scheduled for 0230 GMT.

The proposed measures will need parliamentary approval. President Moon Jae-in’s ruling party secured 180 seats in the 300-member, single-chamber parliament following an election in April, meaning the government should be able to pass the laws in the National Assembly.

Anger over South Korea’s failure to calm runaway home prices has spilled onto top government officials with multiple residences, who are under pressure to sell their second homes to show they are committed to the policy drive.

The policy has focused on imposing heavier tax penalties and mortgage curbs for multiple home owners, as the left-leaning government increasingly blamed renters for stoking a housing bubble.

But as median apartment price in Seoul surged more than 50% through such curbs in the past three years, pressure to unload extra homes has seen top government officials racing to sell their second residences.

Finance minister Hong hastily posted a Facebook message on Thursday: “I put up (my apartment) on sale.”

“As a cabinet member, I’m deeply ashamed of myself in front of fellow citizens, and my acquaintances, amid controversy over multiple homes owned by public servants. To become a single-home owner, I am selling my apartment in Uiwang where I have been with my family.”

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