Emergency Ministerial Meeting on Economic Affairs
Government Works to Improve the Real Estate Tax system and Expand R&D Investment
Deputy Prime Minister Kyungho CHOO presided over the Emergency Ministerial Meeting on Economic Affairs[1] on January 12 to discuss measures to improve the real estate tax system and the pan-government scale-up R&D investment strategies.
The following is a summary of DPM CHOO’s opening remarks.
The government will strengthen policy efforts to overcome imminent crises and achieve economic rebound, while closely monitoring the economic situations in the face of complex economic challenges and uncertainties across the globe.
Measures to improve the real estate tax system
The government decides that temporary two-home owners will now be subject to lower taxes[2] if they offload one of the two homes within three years, which is one more year from the current period of two years. This change will be applied nationwide to lessen the tax burden of those who temporarily became two-home owners among single-home owners with actual demand. The amendment of the related enforcement decrees will be completed within February 2023 to refine the system, but the benefit will be applied retroactively from January 12, 2023.
Going forward, the government will preemptively address difficulties that prospective home buyers with actual demand and vulnerable groups would face, while closely monitoring trends in real estate prices and trading volume.
Pan-government scale-up R&D investment strategy
As major countries have recently joined the fierce competition to develop high technologies and foster start-ups, the Korean government also expanded this year’s R&D budget to 31.1 trillion won, which is the largest-ever, with a view to building new growth engines.
Tapping on its “New Growth Strategy 4.0”, the government will proactively enhance its strategy to foster and produce deep-tech[3] unicorn companies by scaling up technologies.
- Increase the annual investment in R&D to 3.5 trillion won (from the current 2.5 trillion won) by 2027 to develop and obtain national strategic technologies
- Create a pool of critical and emerging technologies on the country’s intellectual property (IP) market platforms[4] and provide support for companies to get a patent, commercialize it and open their businesses
- Build industrial complexes (the so-called “Deep tech scale-up valley”) where universities, government-funded research institutes and companies would cooperate with each other by utilizing existing industrial special zones in a bid to lay a foundation for growing innovation businesses
[1] The meeting was joined by ministers and vice ministers from related ministries including Ministry of Education, Ministry of Science and ICT, Ministry of Agriculture, Food and Rural Affairs, Ministry of Trade, Industry and Energy, Ministry of Health and Welfare, Ministry of Environment, Ministry of Employment and Labor, Ministry of Land, Infrastructure and Transport, Ministry of Oceans and Fisheries, Ministry of SMEs and Startups, Office for Government Policy Coordination, Fair Trade Commission, and Financial Services Commission.
[2] They include capital gains taxes, acquisition taxes and comprehensive real estate holding taxes.
[3] Deep tech, or deep technology, is defined as a new technology that is created through scientific discovery and engineering innovation, and quantum, space exploration and future medical technologies are included in this field.
[4] They refer to websites for transaction of technology and include Emerging Technology Showcase (ETechS), National Tech-Bank (NTB) and Tech-Bridge.
Please refer to the attached pdf.
