South Korea's finance ministry said Thursday owners of two homes will pay less taxes if they dispose of one of them during an extended period amid a slump in the home market.

Under the plan, such homeowners will not be subject to heavier taxation if they offload one of the two homes within a three-year period, according to the Ministry of Economy and Finance.

The ministry earlier extended the period from one to two years in May 2022.

While the revised policy will be officially implemented in February, the ministry said it will be applied retroactively starting Thursday.

The move came amid concerns over a slump in the housing market as the Bank of Korea has been raising borrowing costs aggressively to tame the country's inflation.

The central bank has raised its benchmark policy rate by a combined 2.75 percentage points since August 2021 to the current 3.25 percent. (Yonhap)