▲AI PRISM* Customized Economic Briefing
*Editor's Note: 'AI PRISM' (Personalized Report & Insight Summarizing Media) is an "AI-based customized news recommendation and summary service" developed with support from the Korea Press Foundation. It selects and provides six customized news items for each reader type.
[Key Issue Briefing]
■ Tax Reform Recentered on "Actual Residence": The government is strongly considering an approach to significantly overhaul comprehensive real estate tax and capital gains tax deductions around actual residence requirements in the tax reform plan to be announced late this month. Measures under discussion include reducing comprehensive real estate tax deductions for non-resident single-home owners, creating a separate tax bracket for ultra-high-priced homes, and reducing the ownership portion within the special long-term holding deduction for capital gains tax. Analysts say the entire existing tax-saving structure will need to be re-examined.
■ Mokdong Reconstruction Race: Mokdong Complex 7 received association establishment approval, bringing to five the number of the 14 complexes that have completed association establishment. A timetable requiring project implementation approval before the 2030 ICAO altitude restriction standards take effect is binding the complexes together, resulting in an unusual pattern where association establishment and contractor selection procedures proceed simultaneously across multiple complexes.
■ Household Loan "First-Half Limit Depletion" Warning: The five major banks increased household loans by 3.3907 trillion won during the 1st to 9th of this year, depleting roughly 80% of the annually available amount. With NH unofficially restricting mortgage loans at some branches and Hana halting the acceptance of loan brokers for September execution, a second-half loan shutdown is rapidly spreading.
[News of Interest to Property Investors]
Key Summary: In the tax reform plan to be announced late this month, the government is strongly considering reducing comprehensive real estate tax deductions for non-residents and increasing the ownership tax burden on ultra-high-priced homes. Under the current comprehensive real estate tax, up to 80% tax deduction is possible regardless of actual residence, but after the reform, options being discussed include adding residence period to deduction requirements or setting a deduction ceiling for ultra-high-priced homes. The special long-term holding deduction for capital gains tax is also being reviewed to lower the deduction portion for holding period and expand the deduction for residence period, with some discussing a method that eliminates the holding deduction and applies only the residence deduction up to 80%. A plan to reflect total holding value in the taxation criteria centered on the number of homes is also a key variable, with interpretations that the current inverted structure—in which the comprehensive real estate tax burden on three homes worth 1 billion won each is greater than on one home worth 3 billion won in published price—is likely to be resolved.
2. Fastest Among "APYEOMOKSEONG"... Mokdong Steps on the Reconstruction Gas Pedal
Key Summary: Mokdong Complex 7 received association establishment approval about six months after forming its promotion committee, raising to five the number of the 14 complexes that have completed association establishment. If project implementation approval is not obtained before the 2030 ICAO altitude restriction standards take effect, the currently planned maximum 45-49 story design could be lowered to the 30-story range, so each complex is maximizing its pace. When reconstruction of all 14 complexes is completed, the existing 26,629 units will increase to 47,438 units, and total project costs will exceed 30 trillion won, making it the largest in scale among "APYEOMOKSEONG." Samsung C&T, Hyundai E&C, Lotte E&C, POSCO E&C, and Daewoo E&C are entering the contract competition for each complex, with construction firms' selective bidding competition entering full swing.
3. 800 Trillion Won in Investment Coming... Gwangju Real Estate Heats Up
Key Summary: With Gwangju Airbase confirmed as the site for the 800-trillion-won Honam-region semiconductor national industrial complex, the nearby real estate market has changed dramatically. Asking prices for commercial land in Songjeong-dong, Gwangsan-gu, jumped from 15 million won to 20 million won per 3.3 square meters immediately after the announcement, and asking prices for nearby apartment units of 84 square meters (exclusive area) rose from 330 million won to 410 million won. As owners withdrew their listings, a shortage emerged, and buying inquiries from Seoul have increased two to threefold compared to before, according to local brokerages. The government immediately designated nearby areas as land transaction permission zones to cool investment fervor, but analysts say expectations for regional economic revitalization from semiconductor fab development are supporting the market.
[Reference News for Property Investors]
4. NH NongHyup Bank Restricts Mortgage Loans at Some Branches
Key Summary: The five major commercial banks increased household loans by 3.3907 trillion won by the 9th of this year, depleting around 80% of the annual limit. At NH, cases of mortgage loan acceptance restrictions and rejections are occurring at branches with high volumes of interim payment loans, and Hana has halted the acceptance of loan brokers for September execution of mortgage and jeonse loans. KB has already limited nationwide mortgage loans to a maximum of 300 million won, and concerns are emerging in the financial sector that lending capacity will sharply narrow as the second half approaches. The pace of household loan limit depletion is faster than expected, with forecasts that funding avenues for actual-demand buyers will become even more restricted in the second half.
5. Lee Wraps Up Overseas Trip... Tightens Grip on Fiscal, Real Estate Reform
Key Summary: President Lee Jae-myung will hold a National Real Estate Grand Debate that he chairs directly on the 23rd, following public debates by the Ministry of Land, Infrastructure and Transport, the Financial Services Commission, and the Ministry of Economy and Finance on the 14th to 16th, to further specify the direction of tax reform. Whether the ownership tax and capital gains tax will be reformed is the biggest concern, and differentiated taxation between actual-resident single-home owners and multi-home owners, ultra-high-priced home standards, and ways to utilize the ownership tax will be discussed with the public before being reflected in the tax reform plan and next year's budget plan late this month. As the government has chosen a "deliberative governance" approach of finalizing policy through public debate, observers say the debate results will determine the level of the final reform plan.
Key Summary: The ruling party and government are pushing a plan to codify a provision for special supply of private apartments for workers of relocating companies in the special act for the Southwest-region semiconductor mega-district. The method allocates a certain proportion of private sales volume within the mega-district as special supply to employees of companies in the relevant region, with lower subscription competition rates than general supply raising the chances of winning. The government expects this project to create 1.6 million jobs, and there is discussion of the possibility that the special supply target could expand to education and medical personnel. However, the fact that a bill related to opportunity development zones with a similar purpose has been pending for more than two years after being submitted to the National Assembly in June 2024 is cited as a variable in realizing the legislation.
▶Go to article: NH NongHyup Bank Restricts Mortgage Loans at Some Branches
▶Go to article: "Can't Even Find a Jeonse in Seoul Without Parental Support... Please Ease Newlywed and Youth Loan Limits"
▶Go to article: Trading Value Expansion, Dividend Yield Over 7%... "NH Investment & Securities Has 35% Upside"
