Cheong Wa Dae says President Lee waiving mortgage interest on home sale; gift tax rules to apply

Cheong Wa Dae said Wednesday that President Lee Jae Myung has decided not to collect interest from the buyer of his apartment in Bundang-gu, Seongnam, which he sold for 2.9 billion won ($1.97 million) with a mortgage lien of more than 1.77 billion won attached.

Deputy presidential spokesperson Ahn Gwi-ryeong made the announcement during a segment of "Fact Bangatgan," Cheong Wa Dae's YouTube program, where she discussed the sale of the president's home with Han Moon-do, a professor in the real estate department at Seoul Digital University.

Ahn said the final payment had been deferred until around October — even as a mortgage exceeding half the sale price remained in place — and that the president had chosen to waive the interest. "Given the size of the amount, the interest over several months would be considerable, but he has decided not to collect it," she said.

Han said the decision reflected well on the president. "This appears to be the president showing consideration for the buyer," he said. "Some may ask why he is not collecting interest, but this is a difference of three to four months, not one to two years."

However, some critics raised concerns that waiving the interest could in effect constitute a gift, potentially creating legal complications.

In response, Cheong Wa Dae said any gift tax liability arising from the interest-free arrangement would be handled in accordance with relevant regulations, and that the buyer would pay the applicable gift tax through the proper procedures.