S. Korea unveils measures to boost home sales as economy falters
2013-04-01 16:31:30
In an effort to revamp the flagging property market, the South Korean government has decided to introduce measures to cut tax on home purchases and reduce borrowing costs, after economic growth plunged to a multi-year low amid lackluster global activity.
The new measures are expected to revive South Korea's faltering property market and help growth to regain momentum. The legislation is required to be approved by the parliament.
The Ministry of Land, Infrastructure and Transport, along with four other government organizations, announced that the government would exempt first-time home-buyers with annual income of below 60 million won from taxes on purchases of properties valued not more than ten times of their salary.
Such buyers will also be allowed to borrow more amount than set under the current regulations. At the same time, the existing rules on capital-gains taxes will be relaxed for multiple-home buyers.
The government last week lowered its growth forecast for this year to 2.3 percent from 3 percent projected earlier. The current forecast is lower than 2.8 percent estimated by the central bank.
The economy faces tough challenges in the global market as the weaker yen promotes exports of Japan that competes with South Korea in areas like automobile and electronic products.
Although facing rising pressure to ease monetary policy, the central bank maintained its key interest rate at 2.75 percent for the fifth consecutive month in March. The ministry also called upon the BoK to boost loan support.