SEOUL (REUTERS) - South Korea unveiled measures on Monday aimed at boosting the property market, the first of an expected string of measures from the government of new President Park Geun Hye to stimulate the faltering economy.

Under the plan, first-time home buyers with lower incomes would be allowed to borrow more than the maximum amount set under the existing regulations and would enjoy a lower interest rate than usual when borrowing from a government-run fund.

The government will also exempt those buying a home worth 900 million won (S$1 million) or less during this year from capital gains tax for the next five years whether they sell it back within five years or later.

The measures were announced by the Ministry of Land, Infrastructure and Transport jointly with four other government organisations. The government did not say how much these measures would cost the public finances.

The ministry also said it would scrap an earlier plan to re-impose from next year a punitive capital gains tax of up to 60 per cent for multiple-home owners. The normal capital gains tax rate is between 6 percent and 38 per cent.

South Korea's property market has been in slump for months on falling demand in the face of uncertain global as well as domestic economic prospects while heavy household debt leaves consumers with little room to leverage more.

President Park has promised to take action to revive Asia's fourth-largest economy, including a supplementary budget bill that is expected to be worth at least 12 trillion won, although all of it would not be for additional spending.

Construction spending fell by a real 2.2 per cent last year, marking the fourth year of contraction out of five and contributing to a slowing in economic growth to 2 per cent in 2012 from 3.7 per cent in 2011, central bank data showed earlier.