With the government deciding to open district offices in parts of Seoul and Gyeonggi Province on Saturday to accept land transaction permit applications through the 9th, when the grace period for heavier capital gains taxes on multi-homeowners ends, some brokerages have posted "super quick sale" notices and started selling properties owned by multi-homeowners. However, in most brokerage offices, the prevailing view is that "those who had multiple dwellings and were going to sell have already sold." Those multi-homeowners who had to sell dwellings because of tax burdens reportedly sold in advance out of concern that their land transaction permits would be denied. From buyers' perspectives as well, many have already finished preparing the documents needed to apply for land transaction permits, leading to expectations that there will not be many last-minute applications.
According to the government and the brokerage industry on the 8th, all 25 district offices in Seoul and 12 city and district offices in Gyeonggi will operate normally on Saturday the 9th to receive land transaction permit applications. The 9th is the last day of the grace period for heavier capital gains taxes on multi-homeowners. The government and local governments are said to have distributed official notices through the Korea Association of Realtors(KAR) to each licensed brokerage, stating that they will accept land transaction permit applications from 9 a.m. to 6 p.m.
Following the government's decision, some brokerages listed "super quick sales" even at the last minute. A licensed brokerage in Yeongdeungpo District, Seoul, promoted listings from multi-homeowners, saying, "Because the district office will work through tomorrow (the 9th), land transaction permit applications are possible, making last-minute quick sales feasible. We can adjust the price by about 50 million to 100 million won," and, "These quick-sale listings will soon disappear and prices are expected to surge."
However, in the field, more people think there will not be many cases of snapping up these quick sales and filing land transaction permit applications on the 9th, the day the heavier capital gains tax on multi-homeowners ends. Those multi-homeowners who had to sell dwellings because of tax burdens have already sold, and only those who intend to hold dwellings remain.
The head of a licensed real estate office in Yangcheon District said, "Many properties owned by multi-homeowners have been sold. The phase of trying to sell properties cheaply is over," adding, "Multi-homeowners who are trying to sell have actually raised their asking prices, while buyers say they will not buy at these prices, leaving a large gap between hoped-for prices." A licensed realtor in Yongsan District said, "Those who were going to trade have already done so. Judicial scriveners say that for the past two weeks there have been almost no standard sales, just a few special listings or transactions in the nature of gifts."
Criticism is emerging that the government should have made its decision earlier after announcing, two days before the heavier capital gains tax on multi-homeowners ends, that it would accept land transaction permit applications on Saturday as well. A licensed realtor in Yongsan District said, "We received a notice that officials will accept land transaction permit applications even though tomorrow is a day off, but there isn't a single property to file," adding, "You have to prepare the documents needed to apply for a land transaction permit, so if they had informed us in advance that they would work on the 9th, wouldn't we have prepared?"
A licensed realtor in Mapo District also said, "We assumed the 8th was effectively the last day to submit land transaction permit applications for the end of the heavier capital gains tax on multi-homeowners, and prepared accordingly," adding, "But then the government changed its message and said it would also accept applications on the 9th, which makes fieldwork inconvenient. There will be some demand trying to catch a few quick sales, but I don't think many cases will actually proceed to sales and lead to land transaction permit applications."
If land transaction permit applications for properties owned by multi-homeowners are completed by the 9th, the capital gains tax will not be subject to heavier rates even if the balance payment and transfer of ownership registration are not completed immediately after the sales contract. If the land transaction permit application is completed by the 9th, the three districts in southern Seoul—Seocho, Gangnam, and Songpa—and Yongsan District, which were already designated as regulated areas before the Oct. 15 measures last year, must complete the transaction by Sept. 9, while the 21 newly added districts in Seoul and the 12 areas in Gyeonggi must complete by Nov. 9.