Koo Yun-cheol, Deputy Prime Minister and Minister of Economy and Finance, has signaled the possibility of scaling back the capital gains tax exemption currently granted to purchased rental apartment landlords in designated adjustment zones.
"We are continuing to discuss measures to ensure that locked-up properties come to market and return to actual residents," Koo said Wednesday at a joint meeting of the Emergency Economic Headquarters, Economic Ministers, and Real Estate Ministers held at the Government Complex in Jongno-gu, Seoul. "We are reviewing various options regarding criticism that the permanent capital gains tax exemption benefit given to purchased rental apartment landlords in adjustment zones is excessive from a tax equity perspective."
Koo assessed that the recent real estate market is being restructured from an investment- and speculation-centered structure to one centered on actual residence. He explained that the supply of properties from multi-home owners has been increasing since the January announcement of the plan to end the capital gains tax moratorium for multi-home owners. Among Seoul apartment sale listings in March, 2,087 units were held by multi-home owners, up 32% from the previous year, while the proportion of homeless buyers during the same period reached 73%, higher than last year's average of 56%.
"There are concerns that a property lock-up phenomenon may occur after May 9, but the government's policy will is different from the past," Koo emphasized. "We are fundamentally blocking speculative purchases through lending regulations and the land transaction permit system, and expectations of housing price increases are also declining." He added, "As seen in the KOSPI recently breaking through 7,000, the investment paradigm is shifting from real estate to productive financial sectors such as capital markets."
Koo also stated that legislative work to expand housing supply in Seoul and the metropolitan area is accelerating. At the National Assembly plenary session the previous day, revisions to the Land Compensation Act, the Real Estate Transaction Report Act, and the National Land Planning Act were passed to reduce delays in public housing site projects. Seven supply expansion-related bills, including the Special Act on Public Housing, the Housing Act, and the Urban Redevelopment Act, also passed the National Assembly's Legislation and Judiciary Committee. Koo said he would swiftly complete the remaining legislative procedures for the relevant bills to strengthen the supply base.
Meanwhile, Koo said the government would also respond to supply chain instability and price pressures stemming from the prolonged Middle East war. "The fifth-round ceiling oil prices that took effect at midnight today were frozen for the stability of people's livelihoods and prices," Koo said. "We will continue to address supply chain difficulties for essential consumer goods, including emergency on-site inspections of institutions suspected of excessive syringe purchases."
