Real Estate Tax Bomb Reality? Key Issues in July Tax Reform on Holding and Capital Gains Taxes for Multiple Homeowners
The government is strongly considering tightening the comprehensive real estate tax and capital gains tax for multiple homeowners in the July tax reform. While the goal is to stabilize housing prices, there are concerns about pushback from multiple homeowners and the transfer of rent costs.
Government Considers Stronger Taxes for Multiple Homeowners in July Reform
The government is strongly considering including stricter holding taxes (comprehensive real estate tax) and capital gains taxes for multiple homeowners in the upcoming tax reform plan to be announced in July. As liquidity flows into core metropolitan apartments driving a 16-week consecutive price increase, this move is interpreted as a strong measure to block speculative demand and stabilize housing prices.
Protecting Actual Residents While Curbing Speculation: Key Reform Details
The core stance of this reform is to 'protect actual residents while increasing the tax burden on multiple homeowners and speculative demand'. Specifically, strengthening the holding tax through an upward adjustment of the fair market value ratio for comprehensive real estate tax and an increase in the top tax rate is being discussed. In addition, plans to significantly reduce the special deduction for long-term holding of capital gains tax for non-resident homes or investment-purpose real estate are under review. Furthermore, the possibility of reducing tax benefits previously given to registered rental housing is raising market tension.
Spread of Tax Resistance Among Multiple Homeowners and Market Impact
Following the announcement, tax resistance public opinion is rapidly spreading among multiple homeowners. Some point out that the tax burden could be passed on to tenants, rather fueling an increase in jeonse (deposit-based lease) and monthly rent prices. On the other hand, there is also conflicting analysis that a flood of 'tax-saving urgent sales' from multiple homeowners will contribute to stabilizing housing prices in the short term. With the final plan scheduled to be released at the end of July, a wait-and-see attitude in the real estate market is expected to deepen for the time being.
Key FAQ
- Q. How is the comprehensive real estate tax base expected to change?
A. It is highly likely that the fair market value ratio, currently at 60%, will be gradually increased to raise the actual tax burden. - Q. Will the special deduction for long-term holding of capital gains tax also be reduced for single homeowners?
A. The focus is on protecting single homeowners who actually reside in the property, while reducing deduction benefits for 'non-resident' expensive single homeowners or multiple homeowners. - Q. When is the final announcement of the tax reform plan?
A. After detailed coordination centered on the Ministry of Economy and Finance, it is scheduled to be officially announced as a tax reform plan at the end of July.