South Korea proposes higher property taxes as household loans surge

South Korea announced a package of property‑tax reforms aimed at wealthy homeowners to cool a red‑hot housing market. Finance Minister Koo Yun‑cheol said the plan would raise real‑estate holding tax rates by up to 2.3 percentage points for high‑value homes, tighten exemptions for multiple‑owner properties and adjust thresholds for single‑owner houses. The proposals, discussed at a closed‑door meeting chaired by President Lee Jae‑Myung, will be submitted to parliament by September 3.

At the same time, household borrowing by the country’s five major banks rose sharply in July. Outstanding loans reached 778.8 trillion won, up 3.8 trillion won from June, driven by a 2.3 trillion‑won jump in mortgage lending – the strongest monthly gain since August 2022 – and a 1.4 trillion‑won increase in credit loans. Analysts attribute the surge to persistent demand for housing finance amid soaring home prices in Seoul and surrounding areas, while the Bank of Korea has recently raised interest rates to temper inflation and property‑price growth.