▲ National Tax Service Commissioner Lim Kwang-hyun
National Tax Service (NTS) Commissioner Lim Kwang-hyun projected that providing exit opportunities to multi-home owners who receive tax benefits under the registered rental housing system could have the effect of supplying 68,000 apartments in Seoul.
Commissioner Lim shared his thoughts on the matter in a post titled "Thoughts on Registered Rental Apartments" on his X (formerly Twitter) account today (June 21).
The registered rental housing system is a policy that grants tax benefits, such as exemptions from heavy capital gains taxes upon sale, to multi-home owners who register their properties for rental purposes.
Due to concerns over the system being abused for speculation and causing a "lock-in effect" where properties are withheld from the market, new registrations for apartments are currently prohibited.
Commissioner Lim analyzed, "According to statistics from the National Data Agency, among the 27,000 individual registered rental apartments in Seoul that have been deregistered, excluding the 2,000 units presumed to have been sold based on capital gains tax filings, approximately 25,000 units appear to still be held by multi-home owners."
He pointed out, "Even after the rental period ends, the exemption from heavy capital gains tax for multi-home owners continues, which is intensifying the lock-in effect. Without improvements to the system, there is a high possibility that a similar lock-in situation will be repeated for the 43,000 registered rental apartments in Seoul that are set to be automatically deregistered by 2028."
This means a total of 68,000 units could be subject to the "lock-in" phenomenon.
He stated, "In reality, there is no reason for them to sell," adding, "This is because there are exceptional benefits, such as the heavy capital gains tax for multi-home owners not being applied permanently, and more favorable long-term holding special deductions."
Commissioner Lim noted, "Since the current benefits are somewhat excessive, the voices from the field suggesting that tax reductions during the rental period and benefits for a certain period after termination are sufficient are persuasive."
He continued, "While a review of the rental market is certainly necessary, wouldn't it be wonderful if we could provide an exit opportunity for multi-home owners of registered rentals, allowing the 68,000 units—combining those already deregistered and those scheduled for future deregistration—to enter the market and increase supply?"
He analyzed that if the system were improved, it would have a greater supply effect than the government's own supply plans, stating, "For reference, the scale of housing supply in downtown metropolitan areas under the January 29 Real Estate Measures is 60,000 units."
Previously, President Lee Jae-myung questioned the continuation of the exemption from heavy capital gains tax for registered rental housing in February, stating, "Wouldn't it be fair for various tax treatments for registered rental housing after the rental period ends to be the same as those for general rental housing?"
He added, "Since the burden of immediately abolishing the special exemption from heavy capital gains tax for registered rental housing is too great, there are ways to phase it out after a certain period or gradually abolish it," and mentioned, "There is also an opinion to limit the target to apartments only."
(Photo: Courtesy of the National Tax Service, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.