Property Tax Burden Reduced for 10.89 Million "First-Generation Single-Homeowners"... Property Tax Cut for Publicly Announced Value Under 900 Million Won

Expansion of Special Property Tax Rate Application to Publicly Announced Housing Prices from 600 Million KRW to 900 Million KRW
Local Tax Act Amendment Passed in National Assembly Plenary Session

[Image source=Yonhap News]

[Asia Economy Reporter Lim Cheol-young] From this year, the property tax rate on houses owned by first-generation single-homeowners will be reduced, easing the tax burden on actual single-home buyers.

On the 29th, the Ministry of the Interior and Safety announced that the Local Tax Act amendment bill, which expands the scope of special property tax rates from houses with a publicly announced price of 600 million KRW or less to those with 900 million KRW or less, has passed the National Assembly plenary session.

As of this year, out of a total of 18.77 million houses, 18.19 million houses (96.9%) have a publicly announced price of 900 million KRW or less. Among these, an estimated 10.87 million houses owned by single-homeowners are expected to benefit from the tax rate reduction. According to the Ministry of the Interior and Safety, this tax rate reduction is expected to provide tax support worth 512.4 billion KRW annually (1.54 trillion KRW over three years).

With the application of the special tax rate, property tax on houses with a publicly announced price of 100 million KRW or less will be reduced by up to 30,000 KRW; those priced between 100 million and 250 million KRW will see a reduction of 30,000 to 75,000 KRW; between 250 million and 500 million KRW, a reduction of 75,000 to 150,000 KRW; and between 500 million and 900 million KRW, a reduction of 150,000 to 270,000 KRW. The reduction rate ranges from a maximum of 50% to a minimum of 17.6%, with houses priced at 100 million KRW or less receiving the largest reduction rate of 50%.

For example, in the case of Apartment A located in Seoul, where the publicly announced price rose from 497 million KRW last year to 592 million KRW this year, the property tax will decrease from 1.081 million KRW to 917,000 KRW, a reduction of 164,000 KRW, when the special property tax rate is applied. The government plans to apply this tax rate reduction for three years (2021?2023) but will review it later considering housing market fluctuations and local fiscal conditions.

Meanwhile, the term ‘first-generation single-homeowner’ eligible for the tax rate reduction refers to a household consisting of family members registered together in the resident registration as of the property tax assessment date, June 1, who own one house. Houses held for business purposes are excluded from the count when determining the number of houses. Even if a person owning one house for residential purposes also owns a home daycare, employee housing, or cultural heritage housing, they can still benefit from the tax rate reduction.

Property tax is levied on those who own land, houses, buildings, ships, and aircraft as of June 1 this year. Half of the property tax on houses and the property tax on buildings, ships, and aircraft are levied in July, with the payment period from July 16 to July 31. The remaining half of the property tax on houses and the property tax on land are levied in September.

Property tax payers can conveniently and easily pay their property tax using various payment methods. By using Wetax and Smart Wetax (mobile app), they can check and pay local taxes of all local governments nationwide anytime and anywhere. They can also pay property tax through nearby bank CD/ATM machines using their own bank account or card.

Minister Jeon Hae-cheol said, “Expanding the property tax rate reduction for single-homeowners to houses priced up to 900 million KRW is intended to provide stronger protection for actual single-home buyers,” adding, “We expect this measure to help ease the property tax burden on single-homeowners.”

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