South Korea cutting property taxes to prop up market
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South Korea has announced that it will cut property purchase taxes in a move to offset tougher borrowing rules and keep the recovering housing market from losing strength, Reuters has reported.
The measures come as President Lee Myung-bak and his ruling Grand National Party are suffering falling approval ratings due to rising inflation in the face of upcoming elections in several provinces.
The government has few tools to boost the property market thanks to heavy household debt due to slower growth in disposable incomes, a major economic risk for Asia’s fourth-largest economy.
“We can never underestimate the potentially explosive nature of the household debt issue,” Finance Minister Yoon Jeung-hyun told a news conference.
He was speaking on behalf of the three government ministries and a financial regulatory agency involved in the measures.
The move comes after other Asian countries from China to Singapore implemented measures to contain surging property prices.
