Government to Reclaim Tax Reductions on Acquisition and Property Taxes from Rental Business Operators Violating Mandatory Lease Periods

Joint Inspection by Related Agencies Confirms 3,692 Cases of Public Duty Violations

[Asia Economy Reporter Lim Cheol-young] The government will recover reduced acquisition tax and property tax in cases where rental business registration is canceled due to violations of public obligations such as failure to comply with the mandatory rental period.

On the 31st, the Ministry of the Interior and Safety announced that based on the results of the 2020 public obligation compliance inspection of registered rental housing conducted by the joint task force (TF) of the Ministry of Land, Infrastructure and Transport and local governments, it plans to request cooperation from local governments nationwide to promptly recover the reduced acquisition tax and property tax for houses whose rental registration has been canceled.

For houses registered by rental business operators, benefits such as reductions in national taxes (capital gains tax, rental income tax, comprehensive real estate tax) and local taxes (acquisition tax, property tax) are applied. The Ministry of the Interior and Safety and local governments manage the reduction of local taxes, including acquisition tax and property tax. Even for rental houses that received local tax reductions, if they are sold or gifted within the mandatory rental period or if the rental registration is canceled, these taxes will be recovered.

As a result of the joint inspection conducted from September to December last year targeting all rental business operators, a total of 3,692 cases of public obligation violations were confirmed. Mayors, county governors, and district heads can impose fines based on the severity of the violations detected and cancel the rental business registration. Tax authorities verify whether acquisition tax and property tax reductions were applied to houses whose rental registration was canceled due to public obligation violations and recover the taxes accordingly.

The Ministry of the Interior and Safety stated, "Thorough inspections and follow-up measures must be carried out to ensure that tax benefits are not applied to rental business operators who violate public obligations," adding, "We will cooperate with local governments to promptly recover reduced local taxes for houses whose rental registration is canceled due to public obligation violations, and regularly monitor recovery performance."

They emphasized, "It is important to continuously conduct joint inspections in the future to encourage rental business operators to comply with public obligations."

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