Govt. to introduce measures to boost housing market
The main goal of the government's housing plan is to encourage home buying and stabilize rental prices that have been soaring in recent years.
The problem in Korea's housing market centers around the unique Korean housing system called "jeonse," requiring renters to deposit a large key money with landlords that are paid back when lease contracts expire.
Jeonse prices have skyrocketed recently to well over two-thirds of the value of homes themselves.
Experts attribute the exorbitant jeonse prices to potential buyers trying to avoid purchasing homes out of fear that housing prices may tumble.
In an attempt to stimulate demand, the government is expected to lower taxes for home purchases.
For homes valued at or under 600 million won or roughly 530-thousand U.S. dollars -- those in most demand -- the government will cut property acquisition tax by one percentage point to one percent.
Homeseekers will also be able to get mortgage loans for home purchases at a cheaper price.
The government will work to increase the number of homes available by supplying more public rental houses.
It is pushing the state-run Korea Land & Housing Corporation to bring forward the release of thousands of rental homes currently being built.
Also, the government is expected to increase tax deductions for monthly renters, to lessen the financial burden on people switching from jeonse to monthly rent.
Yoo Li-an, Arirang News.
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