Hi, guys, I’m back again with one of the hottest issues in Korean financial sector.
As you know, these days it is tough to purchase your own house without either loans or government aids. This is so true in Korea, the US and anywhere else. Particularly, in case of Korea, it is getting ever harder to buy a house due to the real estate market in a period of economic stagnation.
That’s why today I am brining this issue which will interest you. A few days ago, an act exempting transfer income tax was passed at Korean National Assembly’s plenary session. What was the background for this unusual decision? Let’s find out more in detail.
For those houses priced under KRW 12 billion, the acquisition tax is halved. There is also a benefit for the houses valued more than KRW 12 billion, as those houses’ acquisition tax rate is lowered from 4% to 3%. The most exceptional amendment is that unsold houses priced less than KRW 9 billion are entitled to transfer tax exemption by 100%!
You should be aware of that all these tax favors are only valid until the end of this year. So if you were thinking about purchasing your own house under your name, this might be the right time to do so.
Indeed, only a few days have passed since the day of the act having passed at the National Assembly. Until now, it seems that only a small margin of transactions has grown in the real estate market. With this newly introduced act, many real estate agents are looking forward to seeing an activated and booming real estate market.
However, experts seem a bit concerned with these new policies that the government is eagerly pursuing. This is because the policy implementation ends at the end of this year, being effective only for few months. It is worried that housing prices are to drop again, once the act is no longer valid. Some are suggesting their voices that policy makers should approach this problem with more conservativeness.