Seoul apartment property gifts double in Gangnam amid tax hikes

Seoul's apartment property gifting has surged in the first half of the year, with a 15.1% increase from the previous year, totaling 3,548 transactions. This rise is largely attributed to homeowners seeking to avoid impending tax hikes on multiple properties.

The Gangnam district, a prime area in Seoul, experienced a dramatic 2.3-fold increase in property gifts, reaching 456 cases. This surge is the highest in five years, following the implementation of the '7.10 Measures' in 2021, which significantly increased taxes on property acquisition, ownership, and transfer.

Across the broader Gangnam 3 districts (Gangnam, Seocho, Songpa), property gifts rose by 12.5% to 1,122 cases. While Songpa saw a substantial 69.5% increase, Seocho experienced a 39.2% decrease. Areas with more mid-priced large apartment complexes in northern Seoul also saw a significant rise, with a 90.6% increase in property gifts.

“

In the second half of the year, there is a possibility that gift demand will increase due to the strengthening of holding taxes and the phased reduction of long-term special capital gains deductions.

Industry experts point to the impending reintroduction of heavy capital gains taxes for multi-homeowners and the government's tightening tax policies as key drivers for the increase in gifts. Many homeowners likely found gifting their properties to children more financially advantageous than selling them before the tax increase took effect in May.

This trend is expected to persist into the second half of the year, following the government's recent tax reform announcement. The new measures will significantly increase the property tax burden for non-resident owners of high-value homes starting next year. Additionally, long-term capital gains tax deductions, which were previously based on holding periods, will transition to long-term residency income deductions by 2029, with a cap of 1 billion won. Experts anticipate that as tax burdens grow, more homeowners, particularly in prime areas like Gangnam, will consider gifting their properties to their children.

“

High-value single-home owners can only consider various options such as selling, holding, or gifting by weighing costs and benefits.