The government plans to announce its first set of measures aimed at reviving the sluggish real estate market on Monday.
The comprehensive plan would likely include various tax cuts on housing transactions. The Finance Ministry and the Ministry of Land, Infrastructure and Transport have been drawing up the measures.
The government had said that it would announce the housing plan before it devised an extra budget to secure funding for job creation and SMEs. The supplementary budget will likely take shape by mid-April, according to the Finance Ministry.
Housing relief measures would likely include exempting taxes on property purchases for first-time apartment buyers or newly-weds, as well as providing low interest rate loans for low and mid-income families.
Rules on capital gains tax could be eased for multiple house owners, while the government aims to boost the number of public houses for the middle class in line with efforts to increase supply and lower apartment prices.
However, rules governing loan assessment and qualification for borrowers are not likely to be eased. Recently, financial policymakers and regulators expressed caution over softening loan-to-value and debt-to-income ratios, saying they were key measures to curb excessive lending.
As rising household debt poses a systemic risk to the country’s economic stability, the Park Geun-hye administration may keep LTV and DTI ratios intact, market analysts said.
The government’s real estate policy comes after the Ministry of Strategy and Finance last week unveiled stimulus measures as part of efforts to boost jobs and the livelihoods of low and mid-income groups.
It also revised its growth estimation to 2.3 percent for this year, down from 3 percent initially announced last year, due to the global economic slowdown.
It also predicted 250,000 jobs would be created this year, down from its projection of 320,000. Some 440,000 jobs were created in 2012, when Korea achieved GDP growth of 2 percent.
By Park Hyong-ki (
hkp@heraldcorp.com)
