Property gifts in Gangnam 3 Districts double in a year...Multi-home owners say, "Better to pass it on than sell"

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Last month, the number of gifted multi-unit buildings (apartments, villas, and officetels) in the Gangnam 3 Districts of Seoul (Gangnam, Seocho, and Songpa) nearly doubled from a year earlier. As the government moves to tighten regulations, many multi-home owners are choosing to transfer their properties to their children.
According to the Court Registration Information Plaza on the 9th, there were a total of 901 cases of gifted multi-unit buildings, including apartments, in Seoul last month. This is about 1.8 times higher than the 514 cases recorded a year earlier.
The increase was particularly notable in the Gangnam 3 Districts. Last month, there were 87 gifts in Gangnam District, 62 in Seocho District, and 56 in Songpa District. Compared with the same period a year earlier, these figures are up 2.1 times (41→87), 1.9 times (32→62), and 1.6 times (36→56), respectively. As heavier capital gains taxes on multi-home owners are set to begin on May 9 and a possible overhaul of property holding taxes is being discussed, gifting activity appears to be accelerating in Gangnam, where high-priced homes are concentrated.
The total number of property gifts in Seoul reached 1,054 last December, the highest level of the year. At that time, however, the increase mainly reflected a rise in joint registrations between spouses, following the first move-ins in 17 years at the large-scale Jamsil Raemian I-Park complex in Jamsil-dong, Songpa District. In other words, it is difficult to interpret that spike as a genuine increase in asset transfers between generations.
Afterward, the number of gifts fell to 785 in January this year, returning to a typical level. But in February, when the heavier taxation on multi-home owners was finalized, the figure rose by about 15% from the previous month. Analysts note that, because there were no new move-ins in the Gangnam 3 Districts in February, the increase likely reflects a real rise in gifting demand.
By age group, more than half of donors were in their 70s or older, while most recipients were in their 40s in Gangnam District and in their 30s in Seocho and Songpa Districts. This suggests that many elderly multi-home owners are transferring properties to children in their 30s and 40s who can afford to pay the gift tax.
Yoon Sumin, a Real Estate Research Fellow at NongHyup Bank (NH Bank), said, "It is hard to say that gifting or fire sales are overwhelmingly high at the moment, but they are clearly on the rise," adding, "The higher the property price, the more common it is to divide ownership shares and gift them." Yoon continued, "Most owners consider gifting, but when children cannot raise the gift tax, some properties are put on the market as quick sales instead," and predicted, "The direction of the market will become clearer after April."
going@fnnews.com Reporter Choi Ga-young Reporter