| People buying unsold houses between the end of this month to year`s end will be exempt from capital gains tax for the next five years. The acquisition tax will also be temporarily halved until the end of the year.
Starting Tuesday, the individual consumption tax (including that for education and value-added tax) imposed on a basic model Hyundai Sonata 2.0 sedan will be lowered from 1.6 million won (1,416 U.S. dollars) to 1.12 million won (992 dollars). That for the subcompact Hyundai Avante 1.6 model will be cut from 1.08 million won (960 dollars) to 759,000 won (672 dollars).
Taxes will also be cut on large-size home electronics including TVs, air conditioners and washers. Accordingly, the sale price of a TV with power consumption exceeding 300 watts set at 1.35 million won (1,199 dollars) will be cut by 29,000 won (25.68 dollars).
These second-stage fiscal support measures were announced by the government Monday after a meeting for revitalizing the economy chaired by Strategy and Finance Minister Bahk Jae-wan.
To stimulate the flagging real estate market, the capital gains tax will be exempted over the next five years for those who buy unsold houses this year. The housing acquisition tax will also be halved from 2 percent to 1 percent for homes worth 900 million won (796,812 dollars) or less, and from 4 percent to 2 percent for homes over 796,812 dollars.
The individual tax rates for cars with a 2.0-liter engine or less will be lowered to 3.5 percent from 5 percent, and from 8 percent to 6.5 percent for cars with engines bigger than two liters. The individual tax rate for large home electronics will also be lowered 1.5 percentage points.
In addition, the withholding tax for earned income will be cut around 10 percent on monthly average to boost the disposable income of wage earners. A person earning 5 million won (4,426 dollars) a month who has family of four will have a tax bill of 240,820 won (213 dollars), down by 28,470 won (25 dollars) or 11 percent.
The amount collected, however, means a lower tax refund at the end of the year, meaning people will have the same tax burden.