South Korea considers tougher property taxes as Gangnam prices surge

SEOUL: South Korea’s finance minister said yesterday the government may consider slapping tough er taxes on property ownership after a string of measures to rein in speculators failed to calm surging prices in wealthy parts of Seoul.

Questioned by reporters at a seminar in Seoul, Kim Dongyeon said the government will mull strengthening property ownership taxes after public opinions are collected on the proposal.

“A considerable part of the (rise) in Gangnam home prices seems to be based on speculative demand,” Kim said, referring to the wealthy Seoul district.

Kim’s comment comes as political pressure mounts to raise levies on property ownership amid worries speculative demand in main regions of the country are stoking a bubble and encouraging binge borrowing.

Seoul home prices continued to rise through fresh mortgage curbs announced in October last year, which includes tightened loan limits for owners of multiple homes.

Average home prices in the exclusive southern Seoul neighbourhood of Gangnam in particular have risen sharply, up nearly 11 per cent in December from a year earlier to 661.5 million won (US$621,185.09), data from KB Kookmin Bank showed.

That compares with the average national home price of 334.4 million won, up 5.2 per cent over the same period. — Reuters