Disputes on Multi-house Owners and Its Solution

There have been long-lasting disputes on the uncertain role of multi-house owners in Korean housing market. Especially, Rho Mu-Hyun government introduced strong regulations against multi-house ownership like punishing rate of capital gains tax and additional comprehensive property tax for multi-house owners under the slogan of ���single house ownership for every household'. However, the related market analyses reveal that those regulations raised housing prices for low and meddle income households. Above all, they failed to improve overall home ownership rate. There exist both harmful and favorable functions of multi-house owners in Korean housing market. Both functions are induced by Chonsei, the distinctive rental market system in Korea. Due to the absence of monthly payment(operating income) in Chonsei contract, there exist few private rental housing enterprises. The operating income is realized as a part of capital gain only in the resale time of the house. Because of this mechanism, mutil-house owners are functioning as primary rental housing providers. However, they are acting as capital gain seekers (speculator) in the housing market at the same time. Therefore, we need a change of institutional settings which can strengthen the pro-side function of multi-house owners as rental housing providers as well as depress their con-side function as speculators. A possible composite alternative required deregulation the excessive rate of capital gains tax and comprehensive property tax for multi-house owners. At the same time, the introduction of rental income tax for Chonsei is required