Hong Nam-ki: "98% of Citizens Unaffected by Comprehensive Real Estate Tax"

Repeating Previous Government Position on Personal SNS

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Moon Chaeseok] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, reiterated the government's position on the 22nd that "98% of the people are not affected by the comprehensive real estate holding tax (종합부동산세, Jonghap Budongsanse)."

On the day the National Tax Service sent out this year's comprehensive real estate holding tax notices, Deputy Prime Minister Hong wrote on his social media (SNS), "This year, 947,000 people received notices for the housing portion of the comprehensive real estate holding tax, with a newly assessed amount of 5.7 trillion KRW, meaning 98% of the entire population will not receive a notice."

The total assessed tax amount for the housing portion of this year's comprehensive real estate holding tax is 5.7 trillion KRW, and the final determined amount is expected to decrease by about 10% to approximately 5 trillion KRW. Hong explained, "One-household-one-home owners bear only 3.5% (200 billion KRW) of the 5.7 trillion KRW housing portion tax, and the proportion of one-household-one-home owners among the taxpayers (18.0% → 13.9%) and tax amount (6.5% → 3.5%) has also decreased compared to last year."

He added, "For one-household-one-home owners, those owning homes with a market value of about 1.6 billion KRW (officially assessed value 1.1 billion KRW) or less are excluded from taxation, and homes exceeding about 1.6 billion KRW in market value account for only 1.9% of all homes. The exemption amount increased from 900 million KRW last year to 1.1 billion KRW this year, which is estimated to have reduced the number of taxpayers by 89,000 and the tax amount by about 80 billion KRW."

He continued, "Among all one-household-one-home owners, 72.5% own homes with a market value of 2.5 billion KRW (officially assessed value 1.7 billion KRW, taxable value 600 million KRW) or less, with an average tax amount of about 500,000 KRW. If the range is expanded to homes with a market value of 2 billion KRW (officially assessed value 1.4 billion KRW, taxable value 300 million KRW) or less, the average tax burden is about 270,000 KRW."

Deputy Prime Minister Hong emphasized that the majority of the tax burden will fall on multi-homeowners and corporations. He explained, "Among the total assessed tax amount of 5.7 trillion KRW, 485,000 multi-homeowners bear 2.7 trillion KRW, and 62,000 corporations bear 2.3 trillion KRW, accounting for 88.9% of the total assessed tax amount. Among the 485,000 multi-homeowners, 415,000 (85.6%) own three or more homes, including two-homeowners in regulated areas, and they bear 96.4% (2.6 trillion KRW) of the multi-homeowner tax amount (2.7 trillion KRW)."

Hong stated that the number of corporate taxpayers increased from 16,000 last year to 62,000 this year, and their tax burden rose from 600 billion KRW to 2.3 trillion KRW. On the other hand, long-term holders and elderly retirees will receive tax benefits. One in three one-household-one-home owners (44,000 people) will receive an 80% reduction compared to their previous tax burden. From this year, couples jointly owning one home can choose between a "1.2 billion KRW exemption" or an "1.1 billion KRW exemption + elderly/long-term holding deduction" method, which is estimated to reduce the number of taxpayers by about 10,000 and the tax amount by about 18 billion KRW.

The comprehensive real estate holding tax revenue is expected to be used as local government resources rather than to cover the central government's fiscal deficit. Hong said, "The entire comprehensive real estate holding tax revenue is transferred to local governments as real estate transfer tax grants and will be used as local government resources for balanced regional development. The government will continue to do its best to operate the tax in line with its original purpose, such as improving tax fairness on real estate holdings, stabilizing real estate prices, and promoting balanced local fiscal development."

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