Loopholes in the’Region Target Area’?… Excluding transfer tax bombs below 300 million

[집슐랭]

Even if it is designated as an area subject to adjustment

Standard market price of 300 million or less in some regions

Excluding documents subject to intensive transfer tax

A real estate agency in downtown Seoul has a listing on the bulletin board./Yonhap News

As a result of the December 17th measures, 36 regions nationwide have been newly designated as areas subject to adjustment, raising the threshold for housing sales by multi-homeowners. This is because if it is included in the area subject to adjustment, the capital gains tax for multi-homed people will be regulated.

However, if a multi-homed person sells a low-cost apartment for less than KRW 300 million (based on the standard market price) in some areas, such as Cheonan, Jeonju, and Yeosu, among the areas included as the target area for adjustment, the excessive transfer tax rate will not be applied. Even in the same regulated area, it is possible to avoid the heavy transfer tax for multi-homeowners depending on their location.

According to the industry on the 28th, some of the areas included in the adjustment target area as a result of the recent 12/17 measures are not subject to heavy transfer tax for multi-homeowners when they sell houses with a base price of 300 million won or less. This is because of the exception clause that houses less than 300 million won in the metropolitan area, metropolitan cities, and areas other than Sejong City are excluded from the transfer tax of 3 or more owners. The provisions included in the amendments to the enforcement decree following the revision of the tax law in 2017 have been in effect since April 2018.

In addition, houses of less than 300 million won in areas other than the metropolitan area, metropolitan city, and Sejong city are not included in the number of houses even when calculating the number of houses held. If the provisions are applied, among the 36 areas that were subject to adjustment by the last 12/17 measures, Cheonan Southeast/Seobuk-gu, Nonsan, Gongju, Wansan and Deokjin-gu, Changwon Seongsan-gu, Pohang Nam-gu, Gyeongsan, Yeosu, Gwangyang, Suncheon, etc. Inexpensive housing in more than 10 regions will circumvent regulations and transfer tax for multi-homed people.

In other words, if a multi-homeowner who owns two and one house in Busan and Changwon, which is the target area for adjustment, sells a house of 300 million won or less in Changwon, they will pay the transfer tax applied with the basic tax rate, not the excessive tax rate.

Meanwhile, as the government’s policy to strengthen regulations on multi-homed people is maintained, the burden of the transfer tax on multi-homed people will increase in the next year. Currently, if you have two houses in the area subject to adjustment, the transfer tax rate is at the level of the basic tax rate + 10% points, and in the case of three houses, the basic tax rate + 20% points. Starting in June next year, a 10% higher tax rate will be applied. That is, if there are 2 houses in the area subject to adjustment, the transfer tax rate reaches the basic tax rate + 20% points, and the basic tax rate + 30% points for 3 houses.
/ Reporter Jiyoon Yang [email protected]

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