Through the third quarter this year, the number of gifts of multi-unit buildings (apartments, multi-family, row houses, and officetels) hit a three-year high.
According to statistics from the Supreme Court Registration Information Plaza on the 14th, nationwide gifts of multi-unit buildings totaled 26,428 cases from January to September this year.
That was up 1,037 cases (4.1%) from 25,391 during the same period a year earlier, and was the most for the same period in three years since 2022, when 34,829 cases were recorded.
In particular, this year Seoul recorded 5,877 gift cases, an increase of 965 cases (19.6%) from the same period last year (4,912).
Gifts of multi-unit buildings such as dwellings remained high through 2020–2022, when the burden of holding taxes surged, but demand fell in 2023. The tax base for gift acquisition tax shifted from the standard market value (posted price) to recognized market value (comparable sales price, appraised value, etc.), increasing the tax burden. The partial recovery of the real estate market starting in 2023 and reduced holding tax burdens under the former Yoon Suk-yeol administration also had an effect.
However, demand for gifting began to rise again last year, and this year the increase has been pronounced in Seoul among owners of multiple dwellings or high-priced dwellings.
By district, Gangnam District recorded the most gift cases from January to September this year with 507, followed by Yangcheon District with 396, Songpa District with 395, and Seocho District with 378, indicating that transactions of gifts were concentrated in the three Gangnam districts (Gangnam, Seocho, and Songpa).
Despite the heavy burden of gift acquisition tax, analysts say the recent government mentions of the need to raise holding taxes have contributed to the increase in gifts. President Lee Jae-myung pledged during the presidential race that he "would not try to rein in home prices with taxes," but sentiment shifted as prices kept rising even after the June 27 lending curbs.
Kim Yong-beom, Presidential Chief of Staff for Policy, said in August, "If it is for stabilizing the real estate market or for housing welfare, the means should not be constrained," adding that the idea the government will not use tax policy is "a miscalculation." On the 29th of last month, Kim Yun-duk, Minister of the Ministry of Land, Infrastructure and Transport in charge of dwellings policy, noted in a personal capacity that "an increase in holding taxes is necessary."
Still, many expect the government will not immediately move to raise taxes in earnest ahead of next year's local elections.