[Anchor]
With tax revisions increasing the incentive for landlords who previously rented out their properties to move in themselves, anxiety is lingering in the lease market. Both landlords, who must move in due to tax burdens, and tenants, who need to find new jeonse homes, find themselves in a state of confusion.
Here is a report by Jeon Hyeong-u.
[Reporter]
Jeonse listings in Daechi-dong, Seoul, a representative school district, decreased by 6.3% compared to a week ago, just before the tax revision proposal was announced.
This appears to be the result of landlords withdrawing jeonse listings to avoid tax burdens through owner-occupancy.
It is becoming increasingly difficult for tenants to find homes.
[Lee Han-seong / Real Estate Agent in Daechi-dong : Moving away from here (for jeonse) won't be easy for you. Prices have risen by 300 million to 400 million won now. Those trying to relocate must have considerable concerns. There are no jeonse listings.]
Compared to a month ago, jeonse listings have dropped by 18.6% in Daechi-dong, Gangnam-gu; 13% in Jamsil-dong, Songpa-gu; and nearly 10% in Gongdeok-dong, Mapo-gu. The already reduced jeonse volume in major areas of Seoul is expected to become even scarcer.
[Park Won-gab / Senior Real Estate Expert, KB Kookmin Bank : In areas densely populated with high-priced homes, the jeonse market is likely to become somewhat unstable; and an increasing number of tenants are expected to choose semi-jeonse or monthly rent because jeonse prices are too high.]
Landlords who gave notice to vacate and suddenly have to make owner-occupancy plans are also in a difficult position.
In particular, the sangsaeng (win-win) landlord system—which exempted landlords from the 2-year residency requirement for the long-term holding special deduction on capital gains tax if they raised rent by less than 5%—is being abolished, and the exemption from heavy capital gains tax for registered rental business operators will also disappear.
If they do not sell their homes by next year, they will bear the full brunt of the tax burden, yet transactions are not easy due to land transaction permission zones and loan regulations.
[Mr. A / Rental Business Operator : I couldn't receive rent (in full) for 10 years, nor could I move in. Why did I continue holding onto that house with such anxiety?]
The Korea Housing Landlords Association argued that "abolishing the capital gains tax special taxation exception promised by the state constitutes retroactive legislation with unconstitutional elements, and is a policy that threatens the housing stability of tenants," demanding a complete reconsideration of the tax revision proposal.
(Photo: Lim Woo-shik | Video Editing: Kim Jin-won)
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