Even if the acquisition tax is increased by 3 times, 80 million won will be saved if debt is added… A burning gift

Park, 67, has two apartments in Gangnam, Seoul. Starting this year, the company plans to dispose of a house to reduce the comprehensive real estate tax, which will increase significantly due to the realization of the official price and tax rate hikes. According to Park’s consultation with a tax accountant, the tax is expected to more than double from 30 million won to 82 million won. While trying to sell one, he has recently been leaning toward gifting children. This is because the transfer tax and gift cost are not significantly different.

Mr. Park said, “It would be more difficult to buy a house if the house price continues to rise in the future, rather than paying the transfer tax by selling it, so I decided to just hand it over.”

Gifts are increasing again. The choice of multi-homeowners to reduce the burden of taxation, which is increasing sharply from this year, is leaning toward gift rather than selling expected by the government. This is because the transfer tax increased significantly due to the surge in house prices, and the effect of strengthening the gift acquisition tax to curb gift gifts was reduced.

According to the Supreme Court, in December of last year, the number of donations for collective buildings (apartments, etc.) in Seoul was 2471. Immediately before the strengthening of the gift-acquisition tax, it increased sharply to 6500 cases, then fell below 1,000 cases after the strengthening, and then increased significantly. The number of donations in December is the largest ever. The number of donations in Gangnam 3-gu (Gangnam, Seocho, Songpa-gu), which fell below 200 per month, also surged to 631 in December last year.

For the current government, the surge in donations that appeared before the taxation was strengthened is recurring. Since this year, the government has significantly increased the tax for multi-homeowners and the transfer tax. At the same time, the strengthening of the transfer tax was postponed after June 1 in order to induce selling before June 1, the time of payment of this year. If you sell it before June 1, you can reduce both the tax on the tax and the transfer.

Previously, the middle of the transfer tax for multi-homed people in 2018 and the strengthening of the taxation tax in 2019 and last year were implemented. At this time, the government also recommended the sale during the transfer tax and due to a delay in the enforcement period or a temporary reduction or exemption.

However, donations have increased rather than selling, and this time they have increased even more. The government raised the gift-acquisition tax rate from 3.5% to 12% in July last year in order to prevent the concentration of gifts, but the effect did not last long.

Selling does not increase noticeably. Since September of last year, the number of monthly sales of collective buildings in Seoul has been maintained at about 22,000. According to Asil, a real estate data site, apartment sales in Seoul average 40,000 a day this month, 40% less than 68,000 in January last year. This means that multi-homed people don’t sell much.

This is because the burden on the transfer tax, which has a higher tax rate than the gift tax, has increased as the house price has risen. Although the gift-acquisition tax rate has risen, the gift-acquisition tax as well as the gift-acquisition tax can be lowered by reducing the amount of the gift through a burdened gift that passes the rental deposit as a debt.

As a result of a simulation of a 59㎡ Dogok Rexle dedicated to Dogok-dong, Gangnam-gu, with a market price of 1.9 billion won by Kim Jong-pil, the transfer tax is 650 million won and the total donation cost (gift tax). , Debt transfer tax, gift and acquisition tax) is 620 million won, which is higher. It was similar in the case of two houses whose transfer tax rate was 10% lower than that of three houses.

If you donate without debt, the gift acquisition tax is KRW 149,000 million, but as a gift with a burden, it is less than half of KRW 67 million. This is because the general tax rate (3%) is applied to the debt amount, not the gift and acquisition tax rate.

Kim Jong-pil, tax accountant, said, “If the donation cost does not cost much more than the transfer tax, they usually want a gift in anticipation of an increase in house prices.”

Gifts are expected to increase further for the time being. Since this year, the transfer tax rate of over 1 billion won in capital gains has risen from 42% to 45%, making it more unfavorable for selling houses that have risen over 1 billion won.

Due to the change in the rental housing business system last year, donations are likely to increase in houses whose rental housing registration is cancelled. According to the Ministry of Land, Infrastructure and Transport, 142,000 houses were deleted in Seoul by the end of last year. If it is canceled, tax benefits such as excluding tax on registered rental housing will disappear.

If you donate only by the end of May, you can avoid this year’s taxation tax, but to save the cost of donation, it is advantageous before the end of April, when the publicly announced price is confirmed. The standard amount for calculating gift and acquisition tax is the published price. Last year, house prices have risen a lot, and the market price reflection rate is expected to rise due to the realization of the official price.

As the number of gifts increases, young people in their 30s and younger own homes, along with’panic buying’ (fear purchase) and’younger purchase’ (by collecting funds in various ways to purchase homes). Last year, 40% of the recipients of the Seoul collective building were in their 20s and 30s. It has risen significantly from the previous 30% line. By age, those in their 30s reached 27% last year, surpassing those in their 40s (22%), which was the most common. Last year, the number of buyers of the Seoul complex was also in their 30s.

Tax Accountant Lee Woo-shin said, “As house prices have risen and the tax system has been strengthened, the timing of donations has accelerated, and the age to receive donations has declined.” Reporter Ahn Jang-won [email protected]