South Korea's Cabinet approved a revision to the enforcement decree of the Income Tax Act, ending a temporary exemption from heavy capital gains taxes for owners of multiple homes. The measure, postponed under the previous Yoon Suk Yeol administration, will resume after nearly four years to stabilize housing prices and curb speculation in the greater Seoul area. It imposes a maximum tax rate of up to 75 percent on sales in designated speculative zones starting May 9.
SEJONG — South Korea's Cabinet on Tuesday approved a revision to the enforcement decree of the Income Tax Act, ending a temporary exemption from heavy capital gains taxes for owners of multiple homes.
Under the revision, a maximum tax rate of up to 75 percent will apply to capital gains from the sale of homes owned by multiple-property holders in designated speculative areas, mostly in the wider capital region, starting on May 9. The heavy taxation, temporarily postponed under the previous President Yoon Suk Yeol administration, will resume after nearly four years.
President Lee Jae Myung has emphasized the need to stabilize rising housing prices and curb real estate speculation, particularly in the greater Seoul area. The government, however, will provide a grace period of four to six months in certain cases where tenants currently occupy properties. Under the measure, a four-month grace period will be given for properties in Seoul's upscale Gangnam and Yongsan districts and up to six months for newly designated speculative zones in all other Seoul districts and some areas of the surrounding Gyeonggi Province. The grace period will apply to cases in which final payments are completed or ownership registration is finalized within the specified time frame.
This policy aims to address speculation in the housing market, potentially influencing sales behavior among multiple home owners.
