South Korean Government keep the faith that property market can rise again

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Yet another plan has been announced by the South Korean Government in a bid to boost the nation’s struggling property market.

The new plan will see a permanent tax cut on capital gains from home sales for owners of multiple properties. The taxes on these sales will be fixed between a scale of 6% and 35%.

This is in contrast to rates of up to 60% that sellers would have had to begin paying from 2013 under previous plans.

The South Korean property market has been in irreversible decline since the 2008 financial crisis had such an impact on the global property industry.

Several attempts have been made by the Government to assist struggling building firms and heavily indebted Korean households who would be significantly affected by weaker prices on their homes.

This past week, the Government announced that mortgage lending growth had slowed considerably due to reduced borrowing related to down payments for apartments.

Not everybody is convinced that these new measures will result in a sustainable turnaround though. Yoo Deok-Sang, a property analyst at Dongbu Securities, is one of these sceptics.

“The easing of policy is unlikely to reverse the sluggish construction market onto a recovery path due to uncertainties in overseas markets,” claimed Sang. “But at least it may stimulate new home purchases due to tax cuts in the short term.”

Transferring money to South Korea

If you are looking to invest in South Korea, think carefully about how you will be transferring money to South Korea. Foreign currency exchange rates quoted by banks are almost always worse than the exchange rates available through specialist currency dealers.

So if you are looking to send money to South Korea – which you will inevitably have to do if you are looking to make a property investment – make sure you compare the market before you buy your overseas currency.

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South Korean Government keep the faith that property market can rise again

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