By Lee Hyo-sik
Staff Reporter
Multiple homeowners who hold units outside southern Seoul will pay less in capital gains taxes when selling their homes through 2010 as part of government efforts to encourage people to purchase more homes amid the slumping housing market.
But those who own more than one unit in property speculation zones ― Gangnam, Seocho and Songpa ― will not benefit from the temporary measure and continue to be subject to the maximum tax rate of 45 percent.
The National Assembly Strategy and Finance Subcommittee passed the revision bill aimed at easing the nation's capital gains tax regime, Monday.
But it was solely passed by members from the governing Grand National Party (GNP) as those from the opposition parties didn't vote to protest the government's plan. The bill will be forwarded to the plenary session for approval.
Once the bill is passed by the Assembly, owners of more than one house outside southern Seoul will be required to pay only 6 to 35 percent in capital gains taxes when selling their units until 2010.
But multiple homeowners in the speculation zones will be subject to an additional 15 percent punitive tax rate on top of the 6 to 35 percent in a bid to prevent property speculation in the affluent area. But in reality, they will pay no more than 45 percent tax, with the government moving to revise the relevant ordinance to set an upper limit to the figure.
Additionally, owners of idle land in Seoul's three rich districts will be subject to up to 45 percent capital gains taxes, while those in other areas will pay tax rates between 6 to 35 percent.
Currently, individuals holding idle land are required to pay 60 percent in capital gains taxes when disposing of the property, with businesses having to pay corporate income taxes on top of 30 percent capital gains tax.
But the Assembly's move will not be enough to satisfy disgruntled multiple homeowners in southern Seoul who sold their units over the past month on the words of Strategy and Finance Minister Yoon Jeung-hyun. On March 16, Yoon said people selling homes beginning the day the step was announced would be entitled to lower capital gains taxes.
Following Yoon's remarks, many unloaded their holdings to save millions of won in capital gains taxes but now will likely have to pay up to an additional 10 percent in capital gains tax.