South Korea’s Cabinet approved Tuesday a revised law to cut the capital gains tax on home sales, in the latest measure to stimulate the real-estate market and boost consumption.

Under the revised law, endorsed at the Cabinet meeting presided over by President Lee Myung-bak, an owner of two houses does not have to owe a flat rate of 50 percent of capital gains earned on a home sale as tax.

Also, an owner of three or more houses does not have to pay a flat rate of 60 percent of gains made on a home sale as tax, according to the revised law.

As the weakening global economy bites South Korea’s export-oriented economy, the government is making all-out efforts to spur consumption.

This week, finance ministry officials said the government will soften a mortgage lending rule to further boost the property market.

Early this month, the Bank of Korea cut its 2012 forecast for the economy to 3 percent, from an earlier outlook of 3.5 percent, citing a global economic slowdown and the eurozone debt crisis.

In a surprise move, the central bank reduced its key interest rate by 25 basis points to 3 percent this month as the world economy is in its worst shape since the global financial crisis that struck in September 2008. (Yonhap News)