The government will expand tax benefits this year to stimulate the local real estate market. When a homeowner purchases unsold dwellings in local areas after completion, the 'one household, one dwelling exception' will be applied in the calculation of capital gains tax and comprehensive real estate tax.
On the 8th, the government held the 11th real estate market and supply situation inspection task force (TF) meeting, jointly chaired by Bum Seok Austin Kim, First Vice Minister of the Ministry of Strategy and Finance, and Jin Hyun-hwan, First Vice Minister of the Ministry of Land, Infrastructure and Transport, with the participation of the Ministry of Strategy and Finance, the Ministry of Land, Infrastructure and Transport, the Ministry of the Interior and Safety, the Financial Services Commission, and the Financial Supervisory Service.
That day, the government discussed tax support to resolve unsold dwellings in local areas. Starting this year, when a homeowner purchases severely unsold dwellings in local areas, the one household, one dwelling exception will be applied in calculating capital gains tax and comprehensive real estate tax. If unsold apartments are utilized as rentals for over two years after completion, the primary acquisition tax for dwelling construction companies will be reduced by up to 50%.
To stabilize the local real estate market, when a homeowner purchases a dwelling in a population declining area, the one household, one dwelling exception will be applied in calculating property tax, capital gains tax, and comprehensive real estate tax. For both non-homeowners and homeowners purchasing dwellings in population declining areas, property tax will be reduced by up to 50%.
As announced in this year’s economic policy direction, the government will apply the one household, one dwelling comprehensive real estate tax exception (from a publicly announced price of up to 300 million won to 400 million won) and plans to swiftly push for amendments to the comprehensive real estate tax law and local government tax law to expand the standard for exempting special taxation on local dwellings from a publicly announced price of 100 million won or less to 200 million won or less within the first quarter.
To activate urban renewal projects, the government plans to closely communicate and consult with the National Assembly on tasks such as enacting the Special Act on Promoting Reconstruction and Redevelopment Projects. The 'Urban Renewal Act,' which includes adjustments to the timing of safety inspections before project approval, and the 'Private Lease Special Act,' which introduces short-term leases for six years for non-apartment units, will be fully implemented starting in June.
The government also aims to stabilize the real estate market through the supply of dwellings. This year, it will supply the highest level of public housing ever, totaling 252,000 units. Plans include obtaining permits for 140,000 public dwellings and starting construction on over 70,000 units.
The government aims to achieve the public new construction purchase lease agreement target of 110,000 units without any setbacks. As of the 3rd of this month, applications for purchases amounting to 245,000 units have been received. Among these, 77,000 units have passed the review. Additionally, for the purchase commitments of unsold public land in the metropolitan area, a total of 25,000 units have been received as of the end of last year, and these lands are expected to expedite housing supply through early construction.
The government will expand the supply of dwellings by providing financial support for real estate project financing (PF) business sites. In the case of PF guarantees provided by the Housing and Urban Guarantee Corporation (HUG) and the Korea Housing Finance Corporation (HF), about 8,000 units worth approximately 17 trillion won of PF guarantees were approved for housing projects last year.
In addition, the government plans to expedite the early execution (450 billion won) of public-supported private rental real estate investment trusts within the first half of the year and will implement government investment to enhance capital for HUG, expanding public guarantees for housing PF, redevelopment projects, and unsold dwellings in local areas to over 30 trillion won.
Participants noted their commitment to continuously monitor the progress of housing supply and to ensure that the market’s trust in housing supply is secured, striving to make the outcomes of expanded housing supply visible on the ground.