Taxpayers in a frenzy over property tax bomb amid loan freeze

Mortgage loans are not easy and credit line limits are reduced
Even if you get a loan, you must consider next year's DSR regulations

[Asia Economy Reporter Kiho Sung] As the first tax bills reflecting the comprehensive real estate tax increase measures under the ‘July 10 Real Estate Policy’ are being sent out, related taxpayers are facing deep concerns. The tax amount is expected to increase more than threefold compared to last year, forcing taxpayers without a lump sum of money to consider loans.

Recently, as the government and financial authorities have pressured both banks and non-bank sectors as part of household debt management measures, it has become difficult to borrow money. In particular, multi-homeowners who must pay real estate taxes in the hundreds of millions of won are facing an emergency in raising lump sums.

According to the government and real estate industry on the 22nd, the National Tax Service began sending out this year’s housing-related comprehensive real estate tax bills from that day. According to the Democratic Party’s Real Estate Special Committee, the tax base for a single household with one home has been expanded from 900 million won to 1.1 billion won. The total number of comprehensive real estate tax payers is 765,000.

The real estate industry estimates that the holding tax (property tax + comprehensive real estate tax) that a person owning two houses in Seoul must pay annually will exceed 100 million won.

The problem is that retirees without proper income or taxpayers without significant savings find it difficult to pay such a large amount. Moreover, due to the total household loan limits imposed by banks, obtaining loans is not easy. Currently, for bank collateral loans, houses priced over 1.5 billion won are not eligible for loans. However, since most houses subject to comprehensive real estate tax in Gangnam are priced above 1.5 billion won, collateral loans are practically impossible. For unsecured loans, it usually takes about a month from application to execution. The filing and payment deadline for the comprehensive real estate tax is from the 1st to the 15th of next month, so time is tight.

The most realistic alternative is an overdraft account, but limits have been significantly reduced or suspended. KB Kookmin, Woori, Shinhan, and Hana Banks have already reduced overdraft limits to 50 million won. NH Nonghyup Bank’s limit is 20 million won. Internet-only banks such as KakaoBank and K Bank have stopped issuing new overdraft accounts for high-credit customers, and Toss Bank has suspended all new loans.

Accordingly, borrowers who have already exhausted their borrowing capacity (Yeongkkeul, meaning ‘pulling together all resources’) or who have debts in multiple places and find it difficult to get additional loans are inevitably facing an emergency in raising lump sums. A bank official said, "Due to government loan regulations, it is difficult for borrowers with existing loans to get new loans," adding, "Cases of borrowing from high-interest secondary financial institutions instead of banks to pay comprehensive real estate tax cannot be ruled out."

If funds are insufficient, installment payments can also be considered. The comprehensive real estate tax can be paid in installments over six months. During this period, no additional tax is imposed. However, only those with a tax amount exceeding 2.5 million won are eligible for installment payments.

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