Single homeowners with houses valued under 600 million KRW to receive a 0.05%p property tax rate cut for 3 years

Five Local Tax-Related Laws Passed by the National Assembly Plenary Session

[Asia Economy Reporter Jo In-kyung] The property tax rate for homeowners with a publicly announced property price of 600 million KRW or less will be reduced by 0.05 percentage points for three years starting next year.

The Ministry of the Interior and Safety announced that the "2020 Local Tax Revenue Related Laws Amendment Bill," including the "Framework Act on Local Taxes," "Local Tax Collection Act," "Local Tax Act," "Local Tax Special Cases Act," and the "Act on Collection of Local Administrative Sanctions and Charges," was passed at the National Assembly plenary session on the 9th and will be enforced from January 1 next year.

First, to ease the tax burden due to the realization of real estate publicly announced prices and to support housing stability for the common people, the property tax rate on housing for single households owning one house with a publicly announced price of 600 million KRW (tax base 360 million KRW) or less will be reduced by 0.05 percentage points according to the tax base bracket.

The resident tax system, which was previously complicatedly composed of uniform tax (individual, individual business owner, corporation), property tax, and employee tax, has been simplified into individual tax, business place tax, and employee tax, and the payment deadline for resident tax has been unified to August, reorganizing the tax system centered on taxpayers. In addition, corporations can exclude foreign paid taxes from the tax base of local income tax, and a tax basis for similar tobacco, which was not previously subject to taxation, has been established to ensure tax fairness.

Under the Local Tax Collection Act, a basis has been established for heads of metropolitan local governments to impose sanctions such as travel bans (for arrears of 30 million KRW or more), public disclosure of names, and provision of financial transaction information (for arrears of 10 million KRW or more) by aggregating delinquent amounts dispersed across local governments. Furthermore, a basis has been established to entrust customs officials with the authority to seize and sell goods imported by high-amount or habitual tax delinquents, allowing seizure and sale at the import customs clearance stage.

The Framework Act on Local Taxes newly establishes a notification deadline (20 days) for results of tax audits to guarantee taxpayer predictability, and integrates delinquent payment penalties and surcharges into a single "delayed payment penalty." Also, the Local Tax Special Cases Act will extend exemptions for agriculture and fisheries sectors, small and medium-sized enterprise support sectors, and individual local income tax to support overcoming the COVID-19 pandemic.

Additionally, to improve the collection rate of local administrative sanctions and charges, a basis has been established to offset delinquent amounts with refund amounts, the restriction criteria for licensed business operations due to delinquency have been strengthened from 1 million KRW to 300,000 KRW, and real estate registration fees borne by local governments during delinquent disposition will be exempted.

The Ministry of the Interior and Safety plans to distribute the 2021 local tax related law enforcement guidelines to each local government to ensure stable operation of these amended local tax laws and conduct "local tax practical training" regionally for local tax officials nationwide.

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