"Rather Than Pay Taxes, Give It to the Children"... Gifts Top 10,000 in the First Quarter

Amid the possibility of tighter tax rules and the burden of rising officially assessed property values, gifts of multi-unit buildings, including apartments, villas and officetels, topped 10,000 in the first quarter. In particular, gifts of such properties in April, just ahead of heavier capital gains taxes on multiple-home owners, reached their highest level in 3 years and 4 months.
■ 10,000 gifts of multi-unit buildings in the first quarter
According to the Court Registration Information Plaza on the 3rd, gifts of multi-unit buildings nationwide from January to April this year totaled 17,462, up 51.2% from 11,550 in the same period last year.
Gifts of multi-unit buildings came to 3,245 in January and 3,392 in February, then surged to 5,233 in March. That pushed the first-quarter total to 11,870.
Even in the first half of last year, monthly gifts of multi-unit buildings mostly stayed below 3,000. But after the Lee Jae-myung administration took office in June, the pace accelerated sharply. In December, the figure reached 3,899, the highest of the year.
The increase in gift transactions is seen as an effort to reduce the tax burden stemming from the implementation of heavier capital gains taxes on multiple-home owners and the possibility of higher property taxes.
This year, officially assessed apartment prices rose sharply, especially in key parts of Seoul. At the same time, the market is discussing the possibility of a tax reform centered on stronger property taxes in the second half of the year.
As tax pressure grows, more people appear to be gifting property to their children earlier.
An industry source said, "Ahead of the heavier capital gains tax, multiple-home owners have increasingly decided that rather than sell apartments in key Seoul areas, they would pass them on to their children."
■ 5,592 gifts in April, the highest in 3 years and 4 months
The upward trend became even steeper in April, one month before the heavier capital gains tax took effect.
Gifts of multi-unit buildings in April totaled 5,592, the highest since December 2022 and the largest in 3 years and 4 months.
The increase was especially clear in the Seoul metropolitan area. Gift transactions in Seoul rose to 1,998, up 44.1% from 1,387 the previous month. In Gyeonggi Province, the number climbed to 1,431, up 10.1% from 1,300.
By district in Seoul, Songpa District recorded the most at 166, surging 102.4% from 82 the previous month. It was followed by 136 in Yangcheon District, 119 in Nowon-gu, 117 in Seocho District, 106 in Yongsan District, 105 in Gangnam District, 104 in Dongjak District and 100 in Gwangjin District.
Experts expect gift transactions to continue for the time being.
Woo Byung-tak, a senior researcher at Shinhan Premier Pathfinder, said, "The number of donors may decline slightly in the future, but overall conditions that encourage gifts are likely to continue. As long as real estate prices do not fall completely, gift transactions will keep taking place if people expect prices to rise."
Meanwhile, as gift transactions increased, the government said it would crack down on disguised gifts. Lim Gwang-hyun, commissioner of the NTS, warned on social networking service (SNS) on the 29th of last month, "The NTS will soon conduct a thorough full review, and in some cases taxpayers could face an additional penalty of up to 40% on top of the original tax due."
act@fnnews.com Choi A-young Reporter