'Bomb-level' Comprehensive Real Estate Tax Notices to be Sent on 22nd... Expected to Affect 800,000 People

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Kwon Haeyoung] Comprehensive real estate tax bills for this week will be issued. Due to the sharp rise in housing prices, it is expected that the number of taxpayers subject to the housing portion of the comprehensive real estate tax will exceed 800,000 this year.

According to the government on the 21st, the Ministry of Economy and Finance will hold a briefing on the 22nd to explain the details related to the '2021 housing portion comprehensive real estate tax' bill.

The National Tax Service plans to send out the comprehensive real estate tax bills for this year on the 22nd. They will be available on Hometax from the 22nd and can be received by mail around the 24th to 25th. The filing and payment deadline is from the 1st to the 15th of next month.

The tax base for the comprehensive real estate tax for a single household with one house has been raised from 900 million KRW to 1.1 billion KRW.

The Democratic Party's Special Committee on Real Estate predicted that the total number of comprehensive real estate tax payers will be 765,000. The housing portion tax revenue is expected to increase up to 5.7363 trillion KRW. If the existing tax base had been maintained, the number of taxpayers was estimated at 854,000, but with the tax base adjustment, it decreased by 89,000.

The predicted total number of taxpayers is 100,000 more than last year's 665,000. The housing portion tax revenue is expected to nearly quadruple from last year's 1.459 trillion KRW. Since real estate prices have risen comprehensively, there is also speculation that the actual number of taxpayers may exceed the forecast and surpass 800,000.

The comprehensive real estate tax is levied on the excess amount when the sum of the publicly announced prices of taxable houses and land owned by an individual as of the tax base date (June 1 every year) exceeds the exemption amount by type. With the publicly announced land prices, the fair market value ratio, and the comprehensive real estate tax rates all rising this year, the tax burden is expected to increase especially for multi-homeowners.

The government is promoting a plan to raise the realization rate of publicly announced prices for apartments and other multi-family housing to 90% by 2030. This year, the nationwide average increase rate of publicly announced prices for multi-family housing was 19.08%, the largest in 14 years. The fair market value ratio also increased from 90% last year to 95%. The comprehensive real estate tax rate for multi-homeowners with two or more houses in regulated areas was nearly doubled, rising from 0.6?3.2% to 1.2?6.0%, an increase of 0.6?2.8 percentage points. The general tax rate for up to two houses increased from 0.5?2.7% to 0.6?3.0%, rising by 0.1?0.3 percentage points.

In the real estate industry, it is predicted that those who own two well-located houses in Seoul will have to pay more than 100 million KRW annually in holding taxes (property tax + comprehensive real estate tax). According to the holding tax simulation by the real estate tax calculation service 'Sellimon,' if one owns an 84㎡ unit in Banpo Acro River Park and an 84㎡ unit in Seoul Mapo Raemian Prugio 1st Complex, the comprehensive real estate tax burden will increase by 161.4%, from 33.79 million KRW last year to 88.34 million KRW this year. The total holding tax burden including property tax will rise by 125.9%, from 44.3 million KRW to 100.9 million KRW.

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