Starting this year, when purchasing local malicious unsold dwellings, the one household one dwelling exception will be applied, potentially saving taxpayers millions of won. However, since these tax benefits can be obtained even without purchasing local unsold dwellings, it remains uncertain whether this measure to address local unsold dwellings will actually lead to revitalization of the local real estate market.
A comparison of capital gains tax when acquiring unsold (malicious unsold) dwellings in non-capital areas, conducted through Hana Bank's Hana the Next Consulting Center on the 13th, revealed that taxpayers could save hundreds of thousands to millions of won.
The government decided to apply the one household one dwelling exception when a single dwelling owner purchases malicious unsold dwellings in the local area starting this year. This means that a single dwelling owner will not be regarded as a multiple dwelling owner and will be recognized as a single dwelling owner, allowing them to benefit from tax incentives available to single dwelling owners. The same tax benefits will apply when purchasing dwellings in population-declining areas.
Currently, the number of malicious unsold dwellings in the local area exceeds 10,000 units. The number of malicious unsold dwellings in the local area, which was 6,226 units in 2022, increased to 8,690 units in 2023 and has been on the rise since reaching 14,802 units last November.
If the one household one dwelling exception is applied to malicious unsold dwellings, assuming that a dwelling acquired in the metropolitan area at 500 million won is sold for 1 billion won after 10 years of ownership, the capital gains tax owed will amount to zero won. Previously, this would have required a capital gains tax payment of approximately 133 million won, classifying it as holding two dwellings.
For owners of high-priced dwellings valued at over 1.2 billion won, the tax savings will decrease. Previously, if one acquired an apartment for 1.5 billion won 10 years ago and then sold it for 3 billion won, the tax payable without applying the special treatment for capital gains tax on malicious unsold dwellings would be 520 million won. However, if the exception is applied, tax payments could be significantly reduced to 52 million won.
The Ministry of Land, Infrastructure and Transport views that this special treatment will be somewhat helpful in addressing the issue of unsold dwellings in the local area. Those who already have homes in the metropolitan area have hesitated to purchase additional dwellings in the local area due to the loss of the one household one dwelling exception, but it is expected that the burden of purchasing local real estate will lessen as they will be recognized as single dwelling owners going forward.
A Ministry of Land, Infrastructure and Transport official noted, "There have been many requests from citizens wanting to apply the one household one dwelling exception for those looking to purchase local dwellings," adding that this could alleviate the burden of acquiring malicious unsold dwellings.
However, it remains uncertain whether the government's special treatment for malicious unsold dwellings will actually help revitalize the local real estate market. The tax savings benefits that can be obtained from this special treatment are available even without purchasing local unsold dwellings. Therefore, it is pointed out that demand for malicious unsold dwellings could only revive if there is a possibility of rising local real estate prices in addition to the tax benefits from the one household one dwelling exception.
Woo Byeong-tak, a consultant at the Shinhan Bank Real Estate Investment Advisory Center, stated, "The difference in tax cannot be the decisive factor for purchasing malicious unsold dwellings," explaining that the low taxes due to tax exemption would provide benefits even if one had not purchased unsold dwellings from the beginning. He further added, "In reality, people will only consider purchasing unsold dwellings if they believe there is a high possibility of price increase in the future."