High-Priced and All-In Single-Home Owners: Why You Should Sell Now

If the 2 billion won and 1 billion won tax deduction caps are applied, taxes are expected to be imposed on the leftover amount of roughly 500 million to 800 million won that exceeds the cap. As a result, many high-priced single-home owners feel the tax burden.

This shows how the purchase decisions made back then are leading to today's tax burden.

One consultant, a man in his 50s approaching retirement, came to an expert worried about loans and taxes. He said the situation would grow even harder and that loans and taxes were becoming unbearable. This suggests that older people nearing retirement feel financial anxiety from housing-related burdens.

They have already heard various advice and tried it, yet remain stuck with unresolved worries. This shows the complexity of housing issues and the importance of solutions tailored to each person's situation.

Worried about a tax bomb, he asked several experts for advice, was told to sell the Namyangju home, and sold it just before this year. However, after the October 15 measures were announced, home prices in the Dasan and Byeollae areas rose, and he came to regret the sale.

You should specify concrete goals, such as whether you intend to hold the home long-term to raise its asset value or plan to sell when short-term gains arise. If consultants fail to convey their true intentions precisely, even experts find it hard to offer a suitable solution. Deep reflection on your asset management goals and clear expression of them are the core of a successful consultation. Rather than discussing only the timing of a sale or tax issues, you should consider your overall asset portfolio and future plans together.

If loans and taxes are a heavy burden, selling the home seems the obvious choice, yet it also looks clear that home prices will rise. In this situation, you must carefully judge whether holding on is better or whether selling now is the wiser choice.

Through consultation they recognize the need to sell themselves, but lack the final confidence. They strongly want confirmation that their decision is right. This lack of confidence is the main reason they fail to act.

Even if they own high-priced homes worth 3 billion or 4 billion won, they are in a position where they must earn living expenses. A house does not directly pay them money, so securing cash by selling is necessary. There are also age groups who feel they are still too young to apply for a reverse mortgage, so securing cash flow by other means is an important task.

Although several experts had uniformly advised "you must sell," he hesitated. After consulting with the author, however, he heard a concrete solution: "There's no need to agonize. In a few months you won't even be able to pay the loan interest, so there's no reason to go on like this," and he decided to sell. This shows that realistic awareness of the situation and a practical solution matter more than simple advice.

A man in his 30s bought a new apartment in Dongdaemun-gu with an "all-in" loan and is agonizing over loan interest and taxes. He has a stable job and good cash flow, but when loan regulations were loose he took a full loan, and now he must pay half of his monthly salary toward loan interest and principal repayment. The new apartment is rising well and trades actively, but the excessive loan burden has become a real hardship.

As holding periods stretch to three or four years and complexes priced at 1.5 billion won or less are expected to rise, there is hope that prices will climb further. But if you do not sell now and a 1 billion won cap is later applied, part of the capital gain, for example 500 million won of a 1.5 billion won gain, could go uncovered by the deduction and be spent on excessive taxes. This creates a "pay tax with the interest you paid" effect, amplifying the frustration of all-in single-home owners.

Selling the home to repay the loan and buying another with the remaining money may seem like common sense, but this consultant has deep concerns. Suppose he bought a 1.9 billion won home that was originally purchased for 1.2 billion to 1.5 billion won and has now risen to 1.5 billion to 1.7 billion won. If he sells it to repay the loan, he worries it will be hard to regain assets worth 1.7 billion to 1.8 billion won, and that after paying loan interest he could only afford a home in the low 1 billion won range, shrinking his asset base considerably. His view is that without taking additional loans, his asset base would fall even further.

People tend to count assets to include not only the cash they hold but also their capacity to use debt, that is, liabilities. So selling the home to repay a loan feels like an actual shrinkage of current assets. The consultant believes that by enduring this he can cover the loan interest, and that if home prices rise further he can build larger assets, so he finds it hard to accept the momentary retreat. He is deeply torn over whether he should accept his assets falling from nearly 2 billion won to the low-to-mid 1 billion won range.

The current consultant is single and living alone, and although the official land price is 1.4 billion won, he is already barely managing. If the official price rises next year, comprehensive real estate tax will apply, and its cap could climb two or three times higher. If taxes keep rising for four years and he must cover them all from his salary, it will be a suffocating situation. If he has ample reserve funds he might hold on without selling, but if not, selling becomes the hard choice. Experts therefore tend to advise selling in such cases.

Current loans should be recognized as a "privilege." Being able to borrow heavily is a special opportunity to expand your assets. If you give up this privilege now, when loans are not readily available, your assets will shrink and the very means of expanding them later may disappear. Whether to give up a loan is therefore a decision that must be made with great care, and the opportunity cost is high. If you already enjoy the benefit of maximizing loan leverage, you should think deeply about your own resolve to either give it up or keep it.

In the 1 billion won range, however, location varies widely, and many complexes are not in core areas, are in second-tier districts, or are not even near stations, making value judgments far more complicated.

If you misjudge a lower-priced property on your own, the loss is not simply reversible; it can incur huge costs, like having to redo concrete work. For these cases, the author stresses that getting expert help is important.

Accordingly, to push redevelopment or reconstruction projects forward, they will likely need to secure more public-interest value to obtain government approval.

Opinions are also being raised that the residence special deduction should be abolished, suggesting that the tax burden from holding and selling homes could grow even heavier.