Gov't to lower tax to revive housing market

In an effort to revive the country's dormant housing market, the government said Wednesday that it will lower the tax rates on home purchases.

This is part of measures to help boost house transactions.

House transactions in the nation dropped to the lowest level in July. According to the Ministry of Land, Infrastructure and Transport, 39,608 houses changed hands last month, down 69.5 percent from the previous month and 30.3 percent from the same month of last year.

According to the announcement, the acquisition tax rate on houses valued at less than 600 million won will be reduced to 1 percent from the current 2 percent; homes valued at between 600 million won and 900 million won will remain unchanged at 2 percent and those over 900 million won will be curtailed by 1 percentage point to 3 percent.

Other measures to reinvigorate the sluggish property market include expansion of the supply of long-term, low-interest rate mortgages for people seeking to buy new homes.

In addition, the government said it will buy houses and put them up for rent to ease a shortage in the rental market.

AJP