'Pinpoint Tax Increase' Targeting Only Top 5% High-End Detached Houses

[Asia Economy Reporter Yoo In-ho] The government is fueling controversy over targeted tax increases aimed at some high-priced homeowners by significantly raising the official prices of single-family homes next year under the pretext of a 'public price realization roadmap.'

While property taxes will decrease for homes with official prices under 600 million won, which account for 95% of nationwide housing, holding taxes will sharply increase for the top 5% of homes.

According to the '2021 Standard Housing Official Price (Draft)' announced by the Ministry of Land, Infrastructure and Transport on the 17th, the official price of standard single-family homes nationwide will rise by 6.68% next year compared to this year, with Seoul's increase rate reaching 10.13%.

The problem is that the official price increase rate for single-family homes is about twice as high as the market price increase rate. In Seoul, the market price increase rate for single-family homes this year, as compiled by KB Kookmin Bank, was only 6.55%, about half the official price increase rate.

The trend is similar nationwide. The official price increase rate is 6.68%, but the market price increase rate compiled by KB Kookmin Bank was only 3.88%. This sharp rise in official prices is due to both the increase in house prices and the higher reflection rate of market prices.

In particular, the government raised the official prices of single-family homes priced over 1.5 billion won by a larger margin. The increase rate reaches 11.58%, nearly twice the national average. The government's policy is to first raise the market price reflection rate for high-priced homes and then sequentially increase it for mid- to low-priced homes, but in effect, this applies a double standard that differentiates realization rates according to house prices.

The burden of holding taxes such as property tax and comprehensive real estate tax for owners of high-priced single-family homes is expected to increase more steeply.

According to the Ministry of Land's simulation, an owner of a single-family home priced at 1.5 billion won will have to pay 2,731,000 won in property tax next year, a 15% increase from this year's 2,369,000 won.

Adding the comprehensive real estate tax of 154,000 won, which will be paid for the first time next year, the total holding tax burden will be 2,885,000 won. For owners of 2 billion won homes, the holding tax will rise 40% from this year's 4,826,000 won to 6,761,000 won.

Among this, the comprehensive real estate tax increases 2.4 times from 969,000 won to 2,369,000 won. This contrasts with homes priced under 600 million won, where property tax actually decreases due to a 0.05 percentage point reduction in the property tax rate over three years.

For example, a home priced at 800 million won will see its official price rise 4.6% from 419 million won this year to 438.27 million won next year, but the property tax will decrease 12% (107,000 won) from 890,000 won to 783,000 won.

An industry insider said, "Although the government claims to be realizing official prices, this can be seen as a targeted tax increase aimed at specific groups," adding, "If landlords switch from jeonse (long-term deposit lease) to monthly rent amid the jeonse shortage, monthly and jeonse prices could rise further."

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