Seoul is putting a heavier tax burden on owners of multiple homes to curb a housing price surge.
The aim is to regulate speculative purchases.
But some say it would turn the eyes of those looking to buy a home to monthly rentals and yearly leases, with newly built apartments failing to find owners.
Todd Thacker reports.

Seoul is raising the tax burden on owners of two or more homes.


According to a newly announced set of tough tax measures, the property acquisition tax rate will increase to between 8 and 12 percent for those with two or more homes. This is up from just 1 to 3 percent.




Property taxes will increase from 3.2 percent to up to 6 percent.
The transfer income tax rate will top out at 72 percent for those who own three or more homes.


With this heavier tax burden for owners of multiple homes, an initial sell-off of properties is expected in areas outside of the Seoul Capital Area (SCA).


The competitive real estate market in the capital is unlikely to see any major shift, though Jeju will not be immune to potential changes in home ownership.


Many houses on the island are owned by mainlanders who use them as vacation homes.
As of 2018, 11.5 percent of local housing was registered by non-islanders.


Concerns are being raised about the effect the tax rise may have on the number of vacant houses on the island.


Unsold new houses in rural areas are not expected to find buyers any time soon.

INTERVIEW
Jung Su-yeon / Professor, Dept. of Economics, Jeju National University
Vacation homes are usually located in remote areas that have a good view. It will be more difficult to find purchasers in such rural areas. But I don’t believe that the new measures will impact housing in urban areas.
<인터뷰 : 정수연 / 제주대학교 경제학과 교수>
별장이 주로 어디 있죠? 풍경이 좋은 곳에 있죠? 외곽에 있죠? 미분양이 많아지는 건 여전히 이쪽(외곽)이고, 제주도민들이 선호하는 (동)지역에는 영향이 거의 없을 거라고 생각합니다."



It appears that this new tax initiative will prompt potential second and third home buyers here to opt instead for monthly rentals or yearly leases. As a result, some expect short-term rental and lease rates to soar.

Todd Thacker, KCTV