S. Korea to stabilize rental housing market through tax cuts, other measures
Updated: 2022-06-21 11:48:18 KST
The Yoon Suk-yeol administration's first package of measures on the property market aims to stabilize rental housing costs to ease the burden on tenants.
Finance Minister Choo Kyung-ho, during his first government meeting on the property market on Tuesday, said there will be tax incentives to encourage the renewal of housing contracts.
"Landlords who voluntarily raise rent by less than 5 percent will be exempt from capital gains tax when selling their homes if they own just one home."
Those landlords who raise rental prices by less than 5 percent, will also get the special tax deduction for owning a property for a long-term even if they have lived in their property for less than two years if they sell that property.
Also, the government plans to ease the burden on tenants under the country's unique 'jeonse' rental agreement that uses a huge lump-sum deposit instead of monthly rent.
"Considering the rise in prices of 'jeonse' for the last four years, the government will increase the maximum home rental loan amount for tenants."
For 'jeonse' tenants, tax deductions for the repayment of home rental loans will be expanded, with the ceiling being extended from the current three million won to four million won or about 3-thousand U.S. dollars.
For tenants who pay monthly rent, the tax credit rate on rent will be raised from the current 12 percent to a maximum of 15 percent.
Also, to get more people on the property ladder, the government will exempt first time buyers from up to 2 million won, or about 15-hundred U.S. dollars of acquisition tax.
The government is to come up with reforms on comprehensive real estate tax by next month and lay out detailed plans on how to supply 2.5 million more homes by mid August.
Eum Ji-young, Arirang News.