900 million won is OK when selling 1.2 billion won of real estate to your children, 890 million won is NO, why?

■ Broadcast: YTN Radio FM 94.5 (09:00-10:00)
■ Host: Reporter Cho Tae-hyun
■ Air date: December 24, 2024 (Tuesday)
■ Talk: Ho Ji-young, tax expert at Woori Bank Asset Management Consulting Center

* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information.

◆ Reporter Cho Tae-hyun (hereinafter referred to as Cho Tae-hyun): It's the rich trend time to tell you about the trend of getting rich. Today, we will meet with Ho Ji-young, a tax expert at Woori Bank's Asset Management Consulting Center. Welcome.

◇ Ho Ji-young, tax expert at Woori Bank Asset Management Consulting Center (hereinafter Ho Ji-young): Hello.

◆ Cho Tae-hyun: When you sell an apartment, you can also sell it to your children. But I think there are some people who are worried about what kind of problems it will be in this process, so what would you say to these people?

◇ Ho Ji-young: In fact, there are many people who do real estate transactions with their children like this, but if you look at the actual transaction price system of the Ministry of Land, Infrastructure and Transport, you can see how many buildings were traded for how much. But if you look closely at it, sometimes you can see that in a complex where there are a lot of transactions, it's traded at 1.2 billion or 1 billion, and then suddenly it's traded at a slightly lower price. Most of those things are transactions like this.

◆ Cho Tae-hyun: Don't we investigate all of them as suspicious transactions?

◇ Ho Ji-young: That's right. Therefore, in the tax law, when there is a real estate transaction between related parties like this, it is presumed to be a gift. So, since it can be inquired unconditionally in the National Tax Service's computer system, these transactions look at such tax issues a little carefully, so you have to check some tax issues and make transactions together. So first, let's look at whether we traded properly at the market price. Secondly, we're going to look at these two points to see if the actual funds actually came and went from that funding source.

◆ Cho Tae-hyun: So no matter how much I sell real estate to my child, the market price is 1 billion won, I shouldn't sell it for 200 million won. And the source of the funds should be clear. What I'm saying today is not tax evasion. It's a tax cut. It will help you a lot if you refer to these parts as well. But the reasonable price is a little bit like that in terms of market price. There is an ambiguous aspect, but wouldn't there be room to sell it to your children a little cheaper?

◇ Ho Ji-young: That's right. Of course, you can sell it cheaply. However, if you sell it too cheaply, the benefit is attributed to the child who bought it cheaply, so there is a gift problem. In the tax law, these transactions are described as low-cost transfers. When real estate transactions between related parties are made, the gift problem is made when the difference between the market price and the actual transaction price exceeds the market price of 30% and 300 million won, which is the smaller amount. Conversely, you can say that there is no gift problem even if you sell a lower amount of 30% or 300 million than the market price.

◆ Cho Tae-hyun: It's up to 29%?

◇ Ho Ji-young: That's right. So, for example, if the house I'm trying to hand over is about 1.2 billion, I can sell it by lowering it to 300 million out of 30% 360 million or 300 million for 1.2 billion, so even if I trade for 900 million, I can tell you that there will be no tax problem. I sold it for less than this. If you say you sold it for 800 million, you can say that gift tax is levied on 100 million won that is the difference because it was sold cheaper than this standard price anyway.

◆ Cho Tae-hyun: 30% and 300 million won. I think it's better to remember this figure. But this part of the poem you mentioned is ambiguous. Since there are so many prices in the market, what standard are you talking about?

◇ Ho Ji-young: Most of you will trade a lot of apartments, but in the case of these apartments, other than the market price, the sale price, and the appraised price, if there is a value traded in the same complex next door, you can see it as a market price when certain requirements are met in the tax law.

◆ Cho Tae-hyun: Is it like the same apartment floor or something?

◇ Ho Ji-young: That's right. There are a few requirements. First of all, the transaction must be within the same complex, and if the difference between the area and the declared price, which is commonly referred to as the price of our apartment house, comes within 5%, the transaction can be viewed as a market price. This can also be an important point based on the transaction date and when it comes into the period. Based on the trading date, Jeon is recognized as the market price if there is a transaction coming within three months after six months. Exceptionally, if there is a transaction value within two years before the transaction date, this can also be recognized as a market price by opening an evaluation review committee.

◆ Cho Tae-hyun: Yes, I see. Does that mean your children can buy a house from their parents without taxes?

◇ Ho Ji-young: That's right. If you say there is no special gift tax problem because you buy it with money, there is no special tax, but since this is a transaction I bought with money, you have to pay for the acquisition tax. It is important to note that acquisition tax also has regulations on such low-cost transfer, so the standards are slightly different at this time. At this time, the standard is 5% and 300 million, so if you exceed this standard amount, you should pay the acquisition tax based on this, considering that even if I actually traded for 900 million, I traded at the market price, and 1.2 billion.

◆ Cho Tae-hyun: Okay. It's hard. Whenever I hear about taxes like this, I always think I should just ask an expert while studying, but how much is the tax difference compared to the gift?

◇ Ho Ji-young: That's right. Compared to the gift, there is a big difference in taxes, so they say it's a little advantageous. So, as an example I heard earlier, if you actually receive a gift of 1.2 billion won in an apartment, this is about 300 million won in tax. But if you say you just buy and buy at a low price, you only need to pay for the acquisition tax, so you only need 30 million won in taxes. Of course, because you have to give 900 million won, you need 900 million won, but it's a huge difference in terms of taxes.

◆ Cho Tae-hyun: I know the tax, but this 900 million won will be a stumbling block. What other precautions should I take when transferring?

◇ Ho Ji-young: As I mentioned earlier, even if you've traded at the market price, you have to pay a lot of attention to whether the source of the 900 million won that this child is coming and going. In fact, if this is a proven fund, there will be no problem if it is a fund that can be sufficiently explained by one's child's income and loans, but there may be a gift problem for the amount beyond that, so you should pay attention to the fund. You can think of it like this.

◆ Cho Tae-hyun: So if parents poke money a little bit in advance, it's all going to get caught. I see. There seem to be many things to consider, but if you are well aware of these points, you will be able to make reasonable tax savings at a legal level, not tax evasion. So far, I have been with Ho Ji-young, a tax expert at Woori Bank's Asset Management Consulting Center. Thank you for talking today.

◇ Ho Ji-young: Thank you.

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