[Anchor]
Let us discuss this in detail with economic reporter Jeong Seong-jin.
Q. What is the effect on stabilizing housing prices?
[Reporter Jeong Seong-jin : First of all, the government repeatedly emphasized one thing while releasing the tax law revision plan. It stated that the measures were not introduced as housing price stabilization or real estate countermeasures, but rather with the goal of tax normalization. The government adds that as a collateral effect, properties put up by multi-homeowners and leasing business operators could have some impact on stabilizing housing prices. Since the tax rate increases more sharply every time the comprehensive real estate holding tax tax-base bracket rises, it is true that the burden has increased for what the government has previously referred to as a single, highly valued home and ultra-high-end housing belonging to the top 0.4 percent. However, it remains uncertain whether this hike is large enough to induce actual sales. Because living in the home offers advantages, the staying power to hold onto properties could actually grow stronger, and while the heavy capital gains tax on multi-homeowners was eased, some reactions indicate that multi-homeowners who wanted to sell before the heavy taxation took effect already sold their properties in the first half of this year. The OECD previously recommended in a report to increase holding taxes while lowering transaction taxes, but the exclusion of transaction tax overhauls—such as acquisition and registration taxes—leaving only the holding tax on ultra-high-end homes partially increased, is also cited as a limitation. Since demand continues to be suppressed, we will have to see how the additional supply measures prepared by the Ministry of Land, Infrastructure and Transport and the loan supplementary measures for youth and supply sectors prepared by financial authorities will turn out.]
Q. Preventing 'Stock Price Suppression'?
[Reporter Jeong Seong-jin : That is correct. In response to criticisms regarding the loophole of 'stock price suppression,' where major shareholders intentionally lower stock prices to reduce inheritance and gift taxes, the government has established two criteria. First, it presented cases where the price-to-book ratio (PBR)—the stock price relative to net asset value—falls under the bottom tier by industry, or where market capitalization drops by 30 percent or more due to actions detrimental to corporate value such as dual listings, as criteria for 'stock price suppression.' When evaluated as such a 'stock price suppression' company, taxes will be levied by increasing the stock value by at least 30 percent or more. The requirements for the family business inheritance deduction, which has been pointed out as a method for expedient inheritance, were also significantly tightened. Family businesses are defined by specialized skills and management know-how, excluding parking lots, hospitals, and pharmacies from the deduction eligibility, with only 727 industries decided to be applicable. Support measures for the youth class were also prepared, such as expanding the youth monthly rent tax credit rate to 17 percent and introducing a youth-type Individual Comprehensive Account (ISA) to apply a 10 percent income deduction on deposits. This revision plan is scheduled to undergo legislative notice from tomorrow, the 4th, through the 20th, pass the Cabinet meeting on the 1st of next month, and be submitted to the National Assembly.]
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