Input 2020.12.29 14:00
On the 29th, as a result of analyzing the whole house (apartment, single, multi-family, multi-family, row house) gift transaction from January 2006 to the present of 2020 through the Ministry of Land, Infrastructure and Transport and the Korea Real Estate Agency, from January to November this year. The number of home donations was 134642, an increase of 23,795 from the previous year’s annual home donation transaction volume (11,847).
The government has repeatedly pressed the multi-homed people by repeating the message “People with a lot of homes will become uncomfortable in the future” and “Sell everything except the one you buy.” In particular, the tax burden has increased significantly. In the last July 10 measures, the comprehensive real estate tax rate for 3 homeowners or 2 homeowners in the adjusted area was raised from 0.6 to 3.2% to 1.2 to 6.0%. This is a measure that hopes for the effect of adjusting the housing price as sales are released on the market due to the burden of the ownership tax.
The government also raised the gift-acquisition tax rate as the sales were not released on the market and only gifts were increased despite the subsequent strengthening of the holding tax burden. If registration was completed before August 11th, the tax rate of 3.5% was applied regardless of the amount of the housing, but from then on, the 12% tax rate has been applied collectively when multi-homed people donate more than 300 million won in the area subject to adjustment.
Accordingly, it seemed to have some effect on the market. The number of donations that recorded a whopping 21,499 cases in July, the record high in July, decreased to △11,4221 in August, △11,829 in September, and △11,430 in October. However, in November, the volume of gift transactions began to increase significantly.
This means that the increased gift tax for multi-homed people felt less burdensome than the increased comprehensive real estate tax. Woo Byung-tak, manager of Shinhan Bank’s Real Estate Investment Advisory Center (tax accountant) said, “Even though the gift-acquisition tax rate tripled and became burdensome. “The calculation of the situation worked.” This means that even if the gift-acquisition tax rate is applied at 12%, it would be beneficial to alleviate the tax burden by distributing the titles of owned houses through donations.
In particular, he analyzed that there is an undefeated sentiment that’the price of the house will increase more’. Team Manager Woo Byung-tak said, “The tax burden has increased, but the phenomenon of having more houses even if they donated because they saw that the house price would increase,” he said. “In the future, many homeowners have similar amounts of inheritance tax or gift tax. “There is also an aspect that I thought of as money that I could only make with money, but I removed it from decision making.”
In terms of supply and demand in the real estate market, the problem is a little more complicated. Once a gift is made, it is generally not easy to come out for sale for the next five years. This means that the’lock up for sale’ phenomenon in the Seoul housing market can intensify. If a spouse or child resells a house donated by a multi-homed person within five years, the amount of the transfer tax is set on the basis of the donor (multi-homed person), which in turn increases the burden of transfer tax.
Experts believe that gift transactions for the purpose of avoiding possession tax will continue to be active until the end of May next year. In the end, some argue that there is a need to change the policy so that houses owned by multi-homeowners can be sold for sale rather than donations to stabilize the housing market.
KB Kookmin Bank’s chief real estate expert expert Hap-soo Park said, “The burden of transfer tax and taxation tax has increased, and the government blocked rental business registration and was forced to give more.” Even if everything is blocked, the supply will inevitably shrink.” “There is a need to open up the market for not only new homes, but also for the supply of existing homes,” he added. “If the holding tax is strengthened, it is a normal retreat to ease the transaction tax (transfer tax).”
An expert in the real estate market who requested anonymity said, “The increase in donations in the second half of this year means that the July 10 measures have actually failed,” and said, “If the number of donations increases, a significant decrease in the number of key supplies that the government originally anticipated” . He argued, “If supply decreases, it will inevitably lead to higher prices, so the government should fully review the regulations even now.”