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Government Unveils Drastic Measures to Control Housing Prices

Write: 2020-07-10 15:08:08Update: 2020-07-10 16:59:32

Government Unveils Drastic Measures to Control Housing Prices

Photo : YONHAP News

Anchor: The South Korean government is clamping down further on real estate speculation and soaring housing prices, announcing Friday it would nearly double the cap on the comprehensive real estate holding tax for multiple homeowners. The ultimate goal is to boost taxes to get people who own more than one home to sell their property and stabilize residential property prices by making more homes available for purchase.
Sam Len reports. 
 
Report: Finance Minister Hong Nam-ki announced a set of toughened measures on Friday aimed at containing soaring residential property values. 
  
The government’s message to multiple homeowners is simple: retain only the home in which you reside and sell the rest to make more homes available for those who can’t afford one. Failure to abide by the recommendation will result in punitive taxes.
  
The latest measures come amid growing public discontent toward the Moon Jae-in administration, which has been trying desperately to make homes more affordable especially in the capital Seoul.
 
[Sound bite: Finance Minister Hong Nam-ki (Korean/English translation)] 
"I would like to apologize to the public following criticism over recent real estate market trends and policies. The government's economic policy team will go all out in our efforts to stem passive income generated in the real estate market and improve the availability of homes to young people thereby promoting stability in the real estate market."

The government's prime targets are owners of multiple homes and real estate speculators. And the main weapon in its arsenal is higher taxes. 
 
[Sound bite: Finance Minister Hong Nam-ki (Korean/English translation)]
"We will deal more sternly with multiple homeowners and speculative real estate transactions aimed at achieving short-term profits by sharply increasing taxes at all stages ranging from purchase to ownership and transfer of rights." 
  
The government will nearly double the cap on the comprehensive real estate holding tax from three-point-two to six percent for owners of multiple homes whose value totals more than nine-point-four billion won.

[Sound bite: Finance Minister Hong Nam-ki (Korean/English translation)]
"We will boldly increase the acquisition tax rate for multiple homeowners and corporate entities by up to 12 percent. We will also strengthen taxes on property ownership." 
  
Starting in 2021, homeowners who sell their homes less than a year from the day of purchase will face a 70-percent transfer tax, compared to the current 40 percent.
 
Those who possess their homes for less than two years will have to pay a 60-percent tax.
 
Meanwhile, the government will expand the special housing supply for newlyweds and families with multiple children to include apartments built by private construction companies and ease income eligibility requirements for the homes.
Sam Len, KBS World Radio News.

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