The grace period suspending the heavy capital gains tax on multiple-home owners ends on the 9th. Accordingly, starting on the 10th, if multiple-home owners sell dwellings in regulated areas such as Seoul, taxes on capital gains will increase sharply.
However, the government allowed those who complete a land transaction permission application by the 9th to finish the remaining procedures, such as ownership transfer registration, as late as November.
According to relevant ministries on the 3rd, in principle, only if, by the 9th of this month, the sale contract, final payment, and registration are completed so that the transfer process is fully finished, can multiple-home owners receive a deferral of the heavy capital gains tax.
The basic capital gains tax rate is currently 6–45%. After the 9th, in regulated areas, an additional 20 percentage points will be added for owners of two dwellings and 30 percentage points for owners of three or more dwellings, and when the 10% local income tax is applied, the effective tax rate rises to as high as 82.5%.
However, in light of the extended transaction period caused by all of Seoul and 12 areas in Gyeonggi being designated as land transaction permission zones under the Oct. 15 measures last year, some supplementary measures were prepared to give multiple-home owners who intend to sell more leeway.
In Seoul's three Gangnam districts (Seocho, Gangnam, and Songpa) and Yongsan District, which were already regulated areas before the Oct. 15 measures, if one applies for land transaction permission by the 9th, then obtains permission and signs a sale contract, and completes the transfer procedures such as final payment and registration by Sept. 9, the heavy capital gains tax will be waived.
In the remaining 21 autonomous districts of Seoul and 12 areas of Gyeonggi, if one applies for land transaction permission by the 9th and completes the transfer procedures by Nov. 9, the heavy capital gains tax will not apply.
Even if there is a tenant in the dwelling that a multiple-home owner intends to sell, a special case easing the owner-occupancy requirement will apply only when the dwelling is transferred to a person without a home.
For dwellings with an existing lease contract as of Feb. 12, the announcement date of the amendment to the Enforcement Decree of the Act on Report on Real Estate Transactions containing these provisions, if land transaction permission is applied for by the 9th of this month, the owner-occupancy requirement will be deferred until the end date of that lease contract. Depending on the lease term, moving in can be postponed until as late as Feb. 11, 2028.
However, if the contract was renewed after the announcement of the amendment, the deferral is not allowed.
In addition, under the June 27 measures last year, in regulated areas, there was an obligation to move in within six months from the mortgage loan execution date, but under this owner-occupancy deferral, moving in can be postponed until the later of "six months from the loan execution date" or "one month after the lease contract ends."