Married Couples with Joint Ownership of One House Can Choose Senior and Long-Term Deduction Benefits Starting from the 16th

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Kim Hyunjung] From the 16th to the 30th of this month, the application process will be conducted to allow married couples who co-own a single house to pay the comprehensive real estate holding tax (종합부동산세) in the same way as single-name owners.

According to the Ministry of Economy and Finance and the National Tax Service on the 6th, following the amendment of the Comprehensive Real Estate Holding Tax Act at the end of last year, married couples who co-own a single house can receive the elderly and long-term holding deductions just like single-name owners who are one household with one house.

At that time, as the government and the ruling party faced market criticism that the tax structure would favor single-name owners after a certain period, they amended Article 10-2 of the Comprehensive Real Estate Holding Tax Act, “Special cases concerning tax obligations of married couples co-owning one house,” and related enforcement ordinances to allow taxpayers to directly choose the applicable area, thereby implementing tax law revisions.

The housing portion of the comprehensive real estate holding tax determines the tax base by summing the official housing prices per taxpayer, subtracting the basic deduction of 600 million KRW, and then multiplying by the fair market value ratio. Reflecting the amendment to the Act passed by the National Assembly at the end of last month, this year, a one-household one-house single-name owner can receive a deduction of 1.1 billion KRW, which is 600 million KRW plus an additional 500 million KRW, while married couples co-owning a house can each deduct 600 million KRW, totaling 1.2 billion KRW.

Although married couples co-owning a house can deduct a total of 1.2 billion KRW, which is more advantageous than a single-name owner with one house, the situation changes if the house is owned by elderly or long-term holders, so careful consideration is necessary.

The current Comprehensive Real Estate Holding Tax Act provides elderly tax credit benefits at the following levels: 20% for those aged 60 to under 65, 30% for those aged 65 to under 70, and 40% for those aged 70 and above. Regarding the holding period, tax credits are given as follows: 20% for 5 years or more but less than 10 years, 40% for 10 years or more but less than 15 years, and 50% for 15 years or more. The combined limit of these two credits is 80% in total.

For married couples co-owning a house to apply for the one-household one-house special case, the spouse with the larger share becomes the taxpayer, and the elderly and long-term holding deductions are applied based on the taxpayer’s age and housing ownership period. If the shares are equal at 50-50, the taxpayer can be chosen. It is advantageous to select the person with a relatively longer housing ownership period or higher age to maximize deduction benefits. The application for tax conversion can be made through the local tax office, and if no separate application is made, the existing ownership status will be maintained.

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