Recently, with an increase in so-called "malignant unsold" dwellings after completion in local areas, a bill has been proposed in the National Assembly to exempt acquisition tax when purchasing unsold dwellings outside the metropolitan area. Real estate experts noted that while the exemption from acquisition tax may help alleviate malignant unsold dwellings to some extent, there are limits without additional benefits.
According to the National Assembly's bill information system on the 14th, Representative Yoon Young-seok of the People Power Party and 11 other lawmakers proposed the "Partial Amendment to the Local Government Tax Special Cases Restriction Act" on the 9th, which includes expanding existing tax benefits for the acquisition tax on malignant unsold dwellings.
The proposed amendment includes raising the acquisition tax reduction from 25% to 50% for malignant unsold dwellings acquired for over two years, expanding the current acquisition value limit from 300 million won to 900 million won. The acquisition tax reduction for unsold dwellings outside the metropolitan area is applicable until December 31 of this year, with a provision to extend the application period by two years.
Additionally, an amendment was also proposed to extend the application period of the current law, which allows a deduction of 5 million won from the calculated acquisition tax for those who give birth to a child or acquire a single dwelling valued at 1.2 billion won or less within five years from the date of birth, and to exempt acquisition tax when purchasing unsold dwellings outside the metropolitan area.
Representative Yoon, the lead proponent of the bill, pointed out, "The housing market in areas outside the metropolitan area is experiencing long-term stagnation, and there are a significant number of dwellings remaining unsold even after completion, which burdens the local economy and the construction industry."
According to the Ministry of Land, Infrastructure and Transport, as of May this year, the nationwide number of malignant unsold dwellings stands at 27,013. This represents a 2.2% increase compared to the previous month (26,422) and a 104.2% increase compared to the same month last year (13,230). The number of malignant unsold dwellings has been increasing for 22 consecutive months since July 2023. Notably, about 83% (22,397 units) of the malignant unsold dwellings are located in regional areas.
However, experts explained that while tax reductions like those proposed in the current amendment might help to some extent in alleviating regional malignant unsold dwellings, additional tax benefits such as capital gains tax reductions are needed. There are also concerns that regions with accumulated malignant unsold dwellings lack elements to attract demand from multiple property owners, resulting in minimal perception of tax benefits.
Ko Jun-seok, a professor at Yonsei University's Sangnam Institute of Management, stated, "While it is important to alleviate malignant unsold dwellings through acquisition tax benefits, the effect is expected to be limited. More urgent than acquisition tax benefits are capital gains tax benefits. Exemptions from capital gains tax for malignant unsold dwellings must be established to help resolve regional unsold dwellings. Furthermore, applying various tax benefits related to malignant unsold dwellings to rental business operators and multiple property owners should be pursued simultaneously."
Yoo Seon-jong, a professor at Konkuk University's Graduate School of Real Estate, remarked, "While the intent to resolve unsold dwellings through acquisition tax reductions is important, what is currently needed is to ease regulations affecting buyers so that malignant unsold dwellings can be absorbed in the market. Additionally, structural incentives such as mortgage-related benefits or exclusion from dwelling count should be provided to activate the local housing market."