Deputy Prime Minister and Minister of Economy and Finance Lee Hyung-il is considering providing additional capital gains tax relief for public sales of rental apartments in designated adjustment areas, such as those managed by the Korea Land and Housing Corporation (LH). This initiative aims to stimulate market transactions and alleviate tenant rental anxieties.
During a press briefing on October 16 in Bangkok, Thailand, at the Queen Sirikit National Convention Center, Lee announced that the government is reviewing tax incentives for public sales of rental apartments in adjustment areas. Previously, the government had set a deadline for capital gains tax benefits on rental properties in these areas, with plans to restore tax burdens after the deadline. However, concerns have been raised about insufficient buyer demand for properties being sold by rental businesses.
Lee explained, "There are reports that rental property owners are struggling to find buyers for their rental apartments, which raises concerns for tenants about rental stability." He added, "If we can sell these rental apartments to the public sector for public use, we are considering additional capital gains tax relief to promote transaction activity."
The anticipated scale of the housing units involved in this policy review is estimated to be around 40,000 to 60,000. The specifics regarding eligible entities, the level of benefits, and implementation details have yet to be finalized.
LH is prominently mentioned as a potential public institution for tax relief. Lee noted, "We will further consider which public sector entities will be involved, but we are reviewing the possibility of providing capital gains tax benefits when rental property owners sell their apartments to public entities like LH."
Lee also stated his intention to directly oversee the Yeongnam region's mega projects. Among the three major mega projects divided into the southwestern, central, and Yeongnam regions, the Ministry of Economy and Finance is responsible for the Yeongnam region, while the Ministry of Trade, Industry and Energy oversees the southwestern and central regions. Lee said, "The Yeongnam mega project task force will now be chaired by the Deputy Prime Minister to ensure continued oversight." He added, "We plan to identify key tasks and resolve related issues swiftly as needed."
Additionally, the establishment of a strategic sovereign wealth fund is being pursued. The relevant legislation has been proposed by lawmakers and is set for discussion in the National Assembly. Lee remarked, "Currently, the Korea Investment Corporation (KIC) invests only overseas, but this new sovereign wealth fund will allow investments both domestically and internationally, providing a great opportunity to grow our strategic industries." This initiative aims to enhance industrial competitiveness by directing funds into domestic strategic sectors, contrasting with KIC's focus on overseas investments.
While in Bangkok, Lee met with the finance ministers of Saudi Arabia and Singapore to request their insights on sovereign wealth fund management. He also opened the door to potential collaborations, including joint investments with foreign sovereign wealth funds. He stated, "Once the law is passed, we will explore opportunities together, and I received very positive responses."
* This article has been translated by AI.
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