The government plans to increase policy loans to further help low-income people buy homes, despite recent measures aimed at cooling down the real estate market, officials said Friday.
The plan is designed to step up support for low-income earners who seek to buy a home they will live in, although the government unveiled new guidelines to tighten lending rules and raise the capital gains tax, to quell property speculation.
Under the plan, the ceiling of policy loans for mortgages for low-income people will rise by about 2 trillion won (US$1.8 billion) to 10 trillion won, according to officials at the Ministry of Land, Infrastructure and Transport.
The policy loans can help a person, who earns 60 million won or less per year and owns no home, to take out a loan of up to 200 million won with favorable interest rates. A person can take advantage of this arrangement to buy a home worth 500 billion won or less.
At the end of last year, about 87,000 people benefited from the policy loans.
This week, the government announced measures targeting the rich and people who own multiple homes to stabilize the housing market.
Among the measures, the government proposed imposing a higher capital gains tax rate on people who own two or more homes from April next year.
The lending ceiling for homes in government-designated "speculative" areas, including Seoul, will be lowered to 40 percent of the property's value from 50 percent. The so-called debt-to-income ratio will also be reduced to 40 percent of the property's value from 50 percent. (Yonhap)