This Year's Single-Homeowner Comprehensive Real Estate Tax Imposition Standard... Market Price 1.57 Billion Won

Democratic Party's Amendment Bill to Pass This Month
Official Price 1.1 Billion KRW, Market Price 1.57 Billion KRW
Houses Above This Likely to Pay Comprehensive Real Estate Tax This Year

Apartment complexes in the Songpa-gu area of Seoul [Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] If the Democratic Party's amendment, which sets the comprehensive real estate tax (종합부동산세) threshold for single-home households at the top 2%, passes the National Assembly, this year's tax threshold is expected to be a publicly announced price of 1.1 billion KRW. When converted to market price, the tax liability will be determined around a housing price of approximately 1.57 billion KRW.

According to the National Assembly and industry sources on the 12th, 23 members including Yoo Dongsoo of the Democratic Party recently proposed an amendment to the Comprehensive Real Estate Tax Act that sets the tax threshold for single-home households at the top 2% of publicly announced housing prices. The ruling party plans to pass the amendment in the National Assembly this month and apply the new regulation starting with this year's tax.

The amendment ranks individuals based on the total publicly announced price of their real estate holdings and sets the top 2%, excluding single-home owners below that threshold from being subject to the comprehensive real estate tax. When determining the top 2% publicly announced price threshold, rounding is applied to the nearest 100 million KRW unit.

Applying this standard, the top 2% publicly announced housing price this year is 1.068 billion KRW, which is rounded to 1.1 billion KRW as the tax threshold. Although the top 2% threshold is 1.068 billion KRW, due to rounding, only those with 1.1 billion KRW or more will be required to pay the tax.

From 1.068 billion KRW to just under 1.1 billion KRW, properties fall within the top 2% but are not subject to the tax. However, if the top 2% threshold later rises to 1.13 billion KRW, the rounded tax threshold remains 1.1 billion KRW, meaning those between 1.1 billion KRW and 1.13 billion KRW would have to pay the tax despite not being in the top 2%.

Applying the 70% market price realization rate, the tax liability threshold this year is expected to be around 1.571 billion KRW in market price. For single-home owners under sole ownership, the tax liability will be determined around this amount. For jointly owned properties by couples, the tax threshold is a publicly announced price of 1.2 billion KRW (market price 1.71 billion KRW).

The amendment stipulates that the top 2% threshold will be adjusted every three years. Therefore, until the year after next, the tax threshold will remain at 1.1 billion KRW publicly announced price. However, if the publicly announced price rises or falls by more than 10% compared to the previous year in the next or following year, adjustments can be made. Additionally, the amendment allows single-home owners aged 60 or older who reside in the property, have a comprehensive income of 30 million KRW or less, and whose tax payment exceeds 2.5 million KRW, to defer tax payments until the sale or transfer of the property.

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