In response to the impending expiration of the capital gains tax exemption for multiple homeowners in South Korea, single-house owners are increasingly listing their properties for sale to avoid the anticipated rise in property tax burdens.
As the deadline for the exemption from the increased capital gains tax on multiple homeowners approaches on May 9, the housing market in Seoul is experiencing a surge in listings. Notably, even single-homeowners, who would typically not be affected by heavy taxation, are placing their properties on the market. This trend is driven by concerns over rising property taxes expected due to last year’s significant price increases, leading many to seek to offload their homes before the tax implications become more severe.
Real estate reports indicate that homes in prestigious districts like Gangnam are seeing price adjustments, with properties recently listed at lower valuations. For instance, a notable apartment in Daechi-dong recently saw its price drop from 42 billion won to around 39 billion won, and similar trends are observed in other luxury units in regions like Olympic Park. The concern among single-home owners stems from the expected increase in the defined property value used for tax assessments, meaning that even without additional homeownership, they still face higher tax bills due to real estate market changes.
In light of these developments, experts suggest that the changes to property tax assessments and the potential reduction of tax exemptions for long-term holdings could compel single-home owners to sell their prized properties now to avoid elevated costs later. With property tax assessments being determined June 1 each year, the current period is deemed critical for sellers trying to minimize tax burdens. Political and economic factors surrounding these tax changes continue to influence homeowner decisions, shaping the landscape of South Korea's real estate market significantly during this period.
