Sales of South Korean homes dwindled significantly from a year earlier in May, the government said Sunday, apparently reflecting worsened consumer sentiment due to a government plan to tax income from real estate rental.

The overall number of home transactions plunged 13.7 percent on-year to 77,754 last month, marking a sharp decline from a 16.6 percent on-year surge in the previous month.

The ministry attributed the drop to what it called a base effect, claiming home sales in May 2013 had surged greatly due to a set of government measures that sought to permanently reduce real estate sales tax.

“Home sales in May dropped 13.7 percent from the same month last year ... However, it marked a 4.2 percent increase from a five-year average between 2009 and 2013,” it said in a press release.

Still, a ministry official acknowledged the government move to raise tax rates on real estate rental income may have had a negative impact on the market. (Yonhap)