South Korea Stimulates Housing Market

South Korea Stimulates Housing Market

Residential News » Asia Pacific Residential News Edition | By Francys Vallecillo | April 1, 2013 4:09 PM ET

South Korea unveiled new measures this week aimed at stimulating the country's property market, part of a campaign to improve the faltering economy.  

First-time home buyers will be allowed to borrow more at a lower interest rate when they borrow from a government-run fund, the New York Times reported.
Home buyers will also be exempt from capital gains tax for the next five years when they purchase a home worth KRW909 million, $808,900, or less. 
The normal capital gains tax in the country is between 6 percent and 38 percent. The Ministry of Land has foregone previous plans to increase the tax to 60 percent for multiple-home buyers, according to the NYT. 
The property announcement comes against the backdrop of escalating tension with North Korea and a faltering economy. South Korea's economic growth decreased to 2 percent in 2012, down from 3.7 percent in 2011. Currently Asia's fourth largest economy, President Park Geun-hye has promised measures for improvement.
Korea is one of several Asian companies wrestling with property policy. This weekend major cities in China announced regulations to calm rising home prices.

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