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(LEAD) S. Korea to impose steeper taxes on multiple home owners to curb housing prices

Economy 10:50 July 10, 2020

(ATTN: ADDS details, remarks in last 5 paras)

SEJONG, July 10 (Yonhap) -- South Korea is set to announce plans to levy tougher taxes on multiple home owners, Finance Minister Hong Nam-ki said Friday, in the latest move to curb housing prices.

The government will raise a punitive tax rate of property ownership tax on multiple home owners and lay out plans to supply more homes in the main regions, Hong told a meeting with economy-related ministers.

The government will announce the plans later in the day.

Hong's remarks came less than a month after the government rolled out measures to stem a further rise in housing prices.

On June 17, the government announced its toughest measures yet to rein in rising housing prices in greater Seoul and some unregulated areas, as a series of steps, including tax hikes and loan regulations, failed to put a brake on soaring home prices.

Stricter lending rules were applied to curb excessive demand for home-backed loans amid cheap borrowing costs, and almost half of the Seoul metropolitan area was put under tighter rules.

Finance Minister Hong Nam-ki speaks at a meeting with economy-related ministers on July 10, 2020. (Yonhap)

Previously, the government had planned to raise the property ownership tax to up to 4 percent from up to 3.2 percent.

Although Hong did not elaborate, the government is widely expected to further raise the ownership tax to up to 6 percent.

Also the government is expected to raise the capital gains tax for people who pocket short-term gains by buying and selling homes.

Hong pledged that the government will rein in speculative investments for homes, but it will continue to ease tax burdens for first-time home buyers.

"The government will maintain its stance of relaxing the tax burden for people with no homes or one home," Hong said.

kdh@yna.co.kr
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