Multiple-home owners give away flats to family as new tax rules loom

Multiple-home owners in one of Seoul’s most expensive districts have been scrambling to give away their apartments to family members or relatives as gifts before toughened tax rules come into force in June, according to data released by the state-run Korea Appraisal Board on Tuesday.

The number of apartment transfers among family members in Gangnam-gu, a southern Seoul district, hit a monthly record high of 812 in March, 6.3 times higher than 129 marked in the previous month, the data showed.

The March figure is the second highest since record-keeping began in January 2013, falling close behind the all-time high of 832 in June 2018.

The number of property transfer cases among family members remained in a range of 47 and 420 in Gangnam since June 2018.

“It seems that owners of multiple homes in Gangnam have decided to hand their apartments down to their family instead of selling them to others to avoid a hefty, comprehensive real estate tax and an increased sales tax for multiple-home owners, which will start to be in place from June,” said Park Won-gab, a senior real estate researcher at KB Kookmin Bank.

From June, owners of two or more homes will be slapped with heavy taxes as the comprehensive real estate tax rate will be raised to 6 percent, up from the maximum rate of 3.2 percent. The current property sales tax rate, ranging from 6 to 45 percent, will also increase to a level between 65 and 75 percent.

The overall number of apartment transfer cases across Seoul increased to 2,019 in March, up from 933 in the previous month.

The posh Gangnam district accounted for 40.2 percent among the total, while Gangdong-gu, an eastern Seoul district, came second with 307 cases, or 34.6 percent. They were followed by Nowon-gu in the northeastern part of Seoul and Gangseo-gu in western Seoul, which recorded 139 and 121 cases, respectively.

Across the nation, 10,281 cases of property giveaways took place in the month, up 57.2 percent from February.

By Kim Young-won (wone0102h@heraldcorp.com)