Exceptions Upon Exceptions Under Real Estate Plan Fuel 'Patchwork' Controversy

[Anchor]

Looking at the government's latest real estate tax system revision, moves to create exceptions to induce property listings are being spotted everywhere. Critics point out that policies repeatedly undermine credibility as the government often implements stringent regulations only to back down and grant exceptions afterward.

Reporter Lee Seong-hoon has the details.

[Reporter]

An apartment complex in Songpa-gu, Seoul.

Following the announcement of the tax revision, some owners are showing signs of putting properties on the market, but the atmosphere suggests it is not easy to lead to actual transactions due to various restrictions.

[Songpa-gu Real Estate Agent, Seoul: For homes where a lot of lease period remains, you can consider that sellers cannot sell even if they want to. There are many such cases. You can see that there are many people who cannot sell due to those circumstances even if they want to.]

In this tax revision, the government announced a plan to temporarily lower heavy capital gains tax rates for multi-home owners to increase market listings.

However, in land transaction permit zones, including all of Seoul and 15 locations in Gyeonggi Province, buyers must move in and live directly within four months of receiving permission.

As criticisms mounted that it is difficult to find buyers for homes with tenants remaining because of long lease terms even for those who want to sell, the government is belatedly reviewing a plan to extend the grace period for the mandatory actual residency requirement for homes with tenants inside permit zones until 2028.

This means tampering once again with the mandatory residency regulation, which was already postponed once until the end of the year ahead of the heavy capital gains tax for multi-home owners last May.

The same goes for single-home owners who do not reside in their properties.

Amid strong backlash over the residency recognition requirements, authorities are discussing additional recognitions such as caring for grandchildren, and expanding the scope of the recognized residency period currently set at three years.

Revisions are also under review to address the abolition of carryover limits and the shortening of contract periods for general Individual Savings Accounts (ISAs).

[Kim Woo-chul / Professor of Taxation, University of Seoul: It is a situation where exception clauses are increasing because criticism follows, but if exceptions keep increasing, it really becomes impossible to know why this was done in the first place. Trust in government policy is bound to be significantly weakened.]

With revisions and supplementary measures successively becoming necessary just a week after the announcement, criticisms are rising that preparations may have been insufficient.

The ruling party and the government plan to collect opinions until the end of this month and make final adjustments to the tax revision.

(Video Editing: Kim Jong-mi, VJ: Jeong Han-wook)
※ Please note: This article was translated by AI and may contain errors.