From the 14th of this month, the government decided to lift the adjustment zone for all areas except for Seoul, Gwacheon, Seongnam, Hanam, and Gwangmyeong. When the adjustment area is lifted, the taxation system, such as acquisition tax, comprehensive real estate tax heavy taxation, capital gains tax heavy taxation and non-taxation, etc., will be significantly different.
When gifting a house, the acquisition tax rate is 3.8%. A heavy tax rate of 12.4% is applied to houses with an official price of 300 million won or more in the adjustment area. However, this shall not be excessive in the case of gifting by a person with one house per household to a spouse or lineal ascendant or descendant.
When a multi-homed person sells a house in the adjustment area at the time of transfer, a heavy tax rate is applied. Therefore, when selling a house in a non-adjustment zone that has been released from an adjustment zone, transfer tax must be paid at the basic tax rate regardless of the number of houses. If a house in the adjustment area is sold by May 9 next year, it will be taxed at the basic tax rate with a temporary exemption from heavy taxation.
If you acquire a house in the adjustment area, tax exemption applies to one house per household only if you have lived there for at least two years during the holding period. However, if acquired in a non-adjusted area, tax exemption is applied as long as it is held for more than two years. The same applies even if it is re-designated as an adjustment area at the time of subsequent transfer.
When the transfer tax exemption for two houses is temporarily applied, the period of disposal of the old house is extended from 2 years to 3 years if the old house is located in an adjusted area and a new house is purchased in a non-adjusted area.
When calculating comprehensive real estate tax, if each person owns three or more houses or two or more houses in an adjusted area, the heavy tax rate (1.2-6%) is applied instead of the basic tax rate (0.6-3%). For example, if Kim Ha-na (pseudonym) owns two houses, a Seoul house with a public notice of 2 billion won and a Sejong house with a public announcement of 1.2 billion won, the basic tax rate is applied, not the heavy tax rate, because Sejong has been lifted from the adjustment area this time. Accordingly, the comprehensive real estate tax next year is expected to decrease by about 20 million won from 37 million won to 17 million won.
Daekyung Kim, Tax Accountant, Wealth Management Group, Hana Bank