Gov‘t imposes tougher taxes on properties to curb speculative buying

Sep 14, 2018, 09:21 am

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By AsiaToday reporter Cho Sang-eun 

The government on Thursday unveiled a set of tough measures aimed to curb property speculation.

Under the new measures, the government said it would impose a tax of up to 3.2 percent to those who own two or more houses in designated areas where speculators have been active, including Seoul, Sejong, and parts of Busan and Gyeonggi. Maximum levy will be doubled to 300 percent from current 150 percent.

Besides, the government created additional bracket for owners of properties valued between 300 million won ($267,042) to 600 million won in the existing five-tier category on landlords. The comprehensive real estate tax rate for properties valued over 300 million won will be subject to 0.2-0.7 percent point hike. The government maintained the current standard for owners of single properties worth over 900 million won to be subject to the comprehensive tax. 

The government expects to attract 420 billion won in tax revenues with the latest measures. 

The government's biggest concern is to curb speculative demands of multiple property owners. "We will thoroughly block the speculative demands of multiple property owners," Finance Minister Kim Dong-yeon said in a press briefing.

No public guarantee will be extended for rent-related loans to a family owning more than two homes. 

The government also decided to tighten grip on lease operators. Those registered as lease operators in designated areas will become subject to loan-to-value ratio of 40 percent. The government banned mortgage loans to purchase properties officially valued over 900 million won. 

The government plans to build 300,000 new homes in Seoul and surrounding areas to boost housing supply.

"If property market shows destabilizing signs again, the government will quickly prepare necessary measures," Kim said.

#property #comprehensive real estate tax #South Korea #speculation #home prices 
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