110,000+ Subject to Last Year's Comprehensive Real Estate Tax Payment... "Increased Tax Burden on Middle Class Next Year"

[Asia Economy Reporter Kwangho Lee] Last year, the number of taxpayers liable for the comprehensive real estate holding tax (종합부동산세) on housing increased by more than 110,000 compared to the previous year, and the tax revenue nearly doubled, approaching 1 trillion won. The highest tax rate was applied to 189 individuals, accounting for 0.04% of the total, who bore 15% of the total tax amount.

The problem lies in next year. Due to the upward adjustment of publicly announced property prices reflecting rising house prices and tax rate increases, the number of single-homeowners facing a 'tax bomb' is expected to surge. When the publicly announced price rises, both the comprehensive real estate holding tax and property tax increase, raising the burden of holding taxes. With the government's successive tax strengthening policies, even innocent low-income and middle-class real demanders are suffering. The growing backlash against punitive taxation and strong tax resistance are due to these reasons.

According to data submitted by the government to the Democratic Party of Korea on the 21st, based on the National Tax Service's '2019 Housing Comprehensive Real Estate Holding Tax Imposition and Notification Status' (individual + corporation), the number of taxpayers last year was tentatively counted at 510,927, with a decided tax amount of 959.4 billion won. Compared to 2018, the number of taxpayers increased by 117,684, and the decided tax amount rose by 516.2 billion won.

According to the analysis by Democratic Party member Yang Kyung-sook of the National Assembly's Planning and Finance Committee, who analyzed statistics by tax base brackets, about 50% of last year's total decided tax amount was collected from two brackets: tax base 600 million to 1.2 billion won and 1.2 billion to 5 billion won (based on publicly announced prices). The tax base for the comprehensive real estate holding tax is calculated by subtracting the basic deduction of 600 million won (900 million won for one household one house owners) from the publicly announced price and then multiplying by the fair market value ratio.

According to Representative Yang, the proportion of decided tax amount in the tax base brackets below 300 million won (30.0% in 2018 → 13.7% in 2019) and over 300 million won to 600 million won (18.7% → 16.7%) decreased compared to the previous year. In contrast, the proportion increased in the brackets over 600 million won to 1.2 billion won (20.3% → 22.3%) and over 1.2 billion won to 5 billion won (22.1% → 28.5%), showing a contrast.

Regarding the number of taxpayers by tax base bracket, the lowest bracket (300 million won or less) decreased its share of the total number (72.4% → 68.1%), while the middle-upper bracket over 300 million won to 600 million won increased (16.9% → 19.0%). The shares of the brackets over 600 million won to 1.2 billion won and over 1.2 billion won to 5 billion won also increased by 1.4 percentage points and 0.8 percentage points, respectively.

The number of taxpayers in the highest tax rate bracket over 9.4 billion won increased from 128 in 2018 to 189 last year, but their share of the total remained similar. The tax amount they bore rose significantly from 67.5 billion won in 2018 to 143.1 billion won last year, but their share of the total remained around 15%.

Representative Yang said, "The increase in last year's comprehensive real estate holding tax revenue centered on the middle-upper tax base brackets compared to the previous year is the result of strengthened fair taxation."

However, some experts and citizens point out that the situation is squeezing even low-income and middle-class people due to soaring house prices caused by government policy failures.

Kim Sang-hoon of the United Future Party said, "It is questionable why the public must repay the Moon Jae-in administration's real estate policy failures with their taxes," adding, "It is hard to gauge how far the tax burden on the public will extend."

A citizen said, "The government said it would strengthen tax burdens only on multi-homeowners and speculative transactions aiming for short-term profits, but the tax burden on single-homeowners is showing up in the indicators," expressing indignation, "With the median price of houses in Seoul reaching 900 million won, the criteria for imposing the comprehensive real estate holding tax should be raised."

This content was produced with the assistance of AI translation services.