Hong Nam-ki "Reviewing Deferral of Comprehensive Real Estate Tax for 'Low-Income Elderly'"

[Sejong=Asia Economy Reporter Son Seonhee] The ruling party and the government announced on the 30th that they are considering deferring taxation for low-income elderly individuals as they push for a reform plan to ease the comprehensive real estate tax (종부세) burden on single-home households to the 'top 2%'.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, said in the afternoon at the Government Complex Sejong during a press meeting regarding the 종부세 reform, "The deferral of taxation has already been reviewed by the government, and we are considering introducing the system."

When discussions on reforming the 종부세 for single-home households first arose, the Democratic Party's Special Committee on Real Estate proposed a 'top 2% taxation plan,' while the government suggested maintaining the current taxation criteria but introduced supplementary measures such as ▲ the introduction of a payment deferral system ▲ freezing the fair market value ratio at 90% ▲ and establishing a long-term residence deduction for over 10 years.

Subsequently, the Democratic Party's party meeting finalized the 'top 2%' taxation plan. However, the necessity of payment deferral for elderly individuals aged 60 and above has continued to be raised, and following Deputy Prime Minister Hong's statement, it appears that the ruling party and government will additionally review this part on the premise of its introduction.

The 종부세 payment deferral system applies to single-home residents aged '60 and above' whose previous year's income is 30 million KRW or less, allowing them to defer 종부세 payments. If tax collateral is provided, payment is deferred until the point of asset ownership changes such as transfer, gift, or inheritance, but interest at a rate of 1.2% based on relevant tax laws is charged on the deferred tax amount.

However, as the 종부세 taxation standard is expected to effectively ease from the existing 900 million KRW to the high 1 billion KRW to 1.1 billion KRW range (estimated) by changing to the 'top 2%' criterion, it is highly likely that other supplementary measures such as freezing the fair market value standard will not be considered.

The ruling party and government are also reportedly not considering easing the taxation criteria for jointly owned properties by married couples.

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