[Anchor]
The aftermath of the government's tax reform announcement five days ago is being felt in the leasing market. Analysts say it has become even harder to find Jeonse (lump-sum deposit lease) homes as landlords who previously rented out their properties are moving in themselves to avoid tax burdens.
Reporter Jeon Hyeong-u has the details.
[Reporter]
Jeonse listings in Daechi-dong, Seoul, known as a major school district, decreased by 6.3% compared to a week ago, right before the tax reform plan was announced.
This appears to be the result of landlords pulling their Jeonse properties off the market to avoid tax burdens through owner-occupancy.
Finding a home is becoming increasingly difficult for tenants.
[Lee Han-sung / Real Estate Agent in Daechi-dong: Moving out for a new Jeonse will not be easy for them. Prices have risen by 300 million to 400 million won right now. Those trying to relocate must have deep concerns. There are simply 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 close to 10% in Gongdeok-dong, Mapo-gu. Jeonse supplies in major areas of Seoul that have recently dwindled are expected to become even scarcer.
[Park Won-갑 / Senior Real Estate Specialist, KB Kookmin Bank: There is a possibility that the Jeonse market may become somewhat unstable in areas densely populated with high-priced homes, and an increasing number of tenants are expected to choose semi-Jeonse or monthly rent due to soaring Jeonse prices.]
Landlords who have given notice to vacate and suddenly have to make plans for owner-occupancy are also in a difficult position.
In particular, the Win-Win Landlord system, which exempted the two-year residency requirement for long-term holding special deductions on capital gains tax by keeping rent increases under 5%, is being abolished, and capital gains tax surcharge exemptions for registered rental business operators will also disappear.
If they do not sell their homes by next year, they will bear the full weight of tax burdens, but transactions are not easy due to land transaction permission zones and loan regulations.
[Mr. A / Rental Business Operator: For 10 years, I couldn't receive full rent, nor could I move in. Why did I keep 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 threatens the housing stability of tenants, demanding a full reconsideration of the tax reform plan.
(Photo courtesy of: Lim Woo-sik | Video Editing: Kim Jin-won)
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