Exemption of Transfer Tax Likely to Be Extended

The government's exemption for the transfer income tax, which is applied to a capital gain on the purchase and subsequent sale of a newly-constructed house or apartment, is likely to be extended to the end of the year.
So far, the tax exemption on the proceeds of a real estate sale has been only applied to the sale of an apartment or house within five years after it has been built. It went into effect last May 22, and was supposed to last until the end of June this year.
The Ministry of Construction and Transportation (MOCT) announced On April 22 that it called for the Ministry of Finance and Economy(MOFE) to extend the exemption period.
An official at MOCT said that the extension is necessary to promote the nation's construction business, which is suffering from a lack of demand for new housing.
A source from MOFE stated that MOFE plans to consider MOCT's proposal after it checks out the national real estate market.
If MOCT's proposal is placed into effect, those who purchase a newly-constructed house will not have to pay the transfer income tax when they sell the house.
Jangsoo Seo:jsbee@joongang.co.kr