People Aged 60 and Over, Income Below 30 Million Won, and Single-Homeowners Likely to Receive Comprehensive Real Estate Tax Payment Deferral

Ruling Party and Government Review Tax Law Amendment Including 'Top 2% Comprehensive Real Estate Tax'

[Sejong=Asia Economy Reporter Kim Hyunjung] Elderly homeowners aged 60 and above who own a single home and are unable to afford the comprehensive real estate tax are expected to receive a deferral on tax payments until they sell, inherit, or gift their property.

According to the Ministry of Economy and Finance and the Democratic Party on the 5th, a plan to defer the comprehensive real estate tax for the elderly is being reviewed between the government and ruling party. The government proposed the deferral eligibility criteria to the ruling party as follows: ▲aged 60 or older ▲single household with one primary residence ▲annual income of 30 million KRW or less in the previous year. The government and ruling party are currently discussing these criteria. The most likely method is to defer tax payments until the point of ownership transfer through sale, gift, or inheritance, on the condition of providing tax payment collateral, while charging an annual interest rate of 1.2%.

The tax deferral system was introduced to protect retired homeowners with a single residence from the increasing burden of holding taxes due to recent rises in official property prices and comprehensive real estate tax rates. It partially accepts the argument that it is unreasonable to force retired single-homeowners without sufficient or stable income to sell their homes because they cannot bear the holding tax burden.

The deferral system was mentioned during the ruling party’s special committee discussions on real estate, and recently Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki officially stated that he is positively considering it. At a recent press briefing, Deputy Prime Minister Hong said, "Tax deferral is something the government has already reviewed, and we are thinking about introducing the system."

The ruling party also considered the deferral system as an alternative if the special committee’s “top 2%” taxation plan was rejected, so there is already some consensus on the system itself and the detailed requirements proposed by the government. Among the ruling party’s proposals, the amendment to the Comprehensive Real Estate Tax Act submitted by 10 members including Kim Suheung, Yang Jeongsuk, and Yoon Gwansuk is virtually the same as the government’s plan. Similar deferral provisions are included in amendments jointly proposed by 10 members including Lee Yongwoo, Hong Seongguk, and Hong Giwon, as well as 12 members including Kim Byungwook, Yoon Youngchan, and Moon Jinseok.

The ruling party plans to handle the comprehensive real estate tax reform targeting the top 2% in the National Assembly this month, and it is highly likely that the tax deferral plan will be discussed together at that time. If the amendment to the Comprehensive Real Estate Tax Act passes during this extraordinary session, the deferral system could be implemented starting from this year’s tax imposition, considering the revision process of enforcement ordinances.

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