Why Does the Tenant Pay Property Tax on 10-Year Public Rental Housing?

[Asia Economy Reporter Lee Chun-hee] It has been confirmed that Korea Land and Housing Corporation (LH) has been shifting property tax burdens onto tenants of '10-year public rental conversion housing.' Last year alone, approximately 3 billion KRW worth of property tax was collected from tenants by including it in the management fees. Criticism is rising that LH has failed to properly fulfill even its basic tax payment obligations.

According to data submitted by Kim Eun-hye, a member of the National Assembly Land, Infrastructure and Transport Committee from the People Power Party, from Seongnam City, Gyeonggi Province, the total property tax for 11 complexes of 10-year public rental conversion housing located in Pangyo, Seongnam City last year amounted to 3.41283 billion KRW. Currently, LH operates 7 of the 11 complexes, while 4 are managed by private operators. The property tax collected from LH-operated complexes was 3.06035 billion KRW, accounting for about 89.7% of the total.

The scale of property tax has gradually increased. In 2012, the property tax for the 7 LH complexes was 1.675 billion KRW. It has nearly doubled in 8 years. Assemblywoman Kim Eun-hye analyzed, "Since the real estate prices, which form the basis for calculating property tax, have surged noticeably within a year, the property tax for this year, which has not yet been finalized, is expected to increase further."

The problem is that the property tax is being borne by tenants, not LH. LH has been collecting property tax from 3,952 tenant households by including it in the management fees. The common sense that the homeowner pays the property tax does not apply here.

A Ministry of Land, Infrastructure and Transport official explained, "It is understood that property tax is included in the costs incurred while operating public rental housing at a rate cheaper than surrounding rental prices for 10 years," and "since public rental housing uses public funds, it seems reasonable that operating costs should be borne."

Kim Eun-hye, Member of the People Power Party (Provided by Kim Eun-hye's Office)

Assemblywoman Kim pointed out, "Even though they are the same type of public rental conversion housing, property tax was not passed on to tenants of 5-year public rental conversion housing," and criticized, "This perception by the Ministry of Land, Infrastructure and Transport is hard to accept." LH did not include property tax in the management fees for 5-year public rental conversion housing and bore the full amount itself.

Assemblywoman Kim said, "The government says it has no plans to promote 10-year public rental housing anymore. Ultimately, only the homeless and low-income citizens have become victims of poorly designed policies," and added, "The current administration, which feels no remorse for breaking its pledges, must apologize for shifting the harms of flawed real estate policies onto ordinary citizens and present measures to prevent recurrence."

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