The South Korean government reportedly announced a package of proposed tax measures on 17 June to increase taxation on residential rental property in order to cool the market. Measures include an increase in property tax on companies owning up to two residential rental properties from 0.6% of assessed value to 3.0%, and where three or more rental properties are owned, the rate will increase from 0.8% to 4.0%. Further, the current KRW 600 million tax exemption for rental properties would no longer apply for companies. Lastly, the package provides for an increase in the additional capital gains tax on sales of residential rental property by companies from 10% to 20%.
The property tax changes are to apply from 1 June 2021, while the capital gains tax change is to apply from 1 January 2021.
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