[Yonhap Photo]
The new liberal government of President Moon Jae-in rolled back an easy housing-market policy pushed by his conservative predecessor to curb a steady and excessive rise in home prices, led by apartments in Seoul, with tough lending rules and high taxes on speculative transactions.
All 25 districts in Seoul and two cities including Gwacheon, a southern satellite city, and the central city of Sejong as "overheated speculative districts".
Real estate transactions, especially in 11 hot spots in the three cities, face tough regulations and scrutiny, the land ministry said, adding multiple-home owners would pay higher capital gains tax when they sell houses.
Homebuyers are not allowed to borrow more than 40 percent of their property value and a maximum 40 percent of their income for mortgage payments. The government will restrict purchase rights of new apartments, which have been used for speculation.
In a bid to rejuvenate the sagging real estate market, jailed ex-president Park Geun-hye allowed tax cuts for multiple-home owners. Under new rules, high taxes will be imposed.
Government officials blamed speculative forces for driving up home prices and household debt, saying the new government would try hard to curb short-term speculative demand in favor of those who actually need houses.
Since Moon took office in early May, demand for mortgage loans, the main culprit for soaring household debt, has surged as Asia's fourth-largest economy showed signs of recovery. A high level of household debt has been viewed as a potential "time bomb" for the economy.
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