Inheritance housing, multi-homeowner criteria to be eased... Government reviews enforcement ordinance amendment

View of Seoul apartments from 63 Square in Yeouido, Seoul. [Source=Yonhap News]

[Sejong=Asia Economy Reporter Son Seon-hee] It has been reported that the government is considering easing the criteria for the comprehensive real estate holding tax (종합부동산세, 종부세) surcharge for those classified as "multi-homeowners" due to suddenly inheriting a house after the death of their parents.

According to the Ministry of Economy and Finance on the 13th, the government is reportedly reviewing a revision to the Enforcement Decree of the Comprehensive Real Estate Holding Tax Act reflecting this content. The intention is to reduce the tax burden for those who unexpectedly became multi-homeowners due to sudden inheritance beyond their control, resulting in a sharp increase in 종부세 burden.

The current Enforcement Decree of the Comprehensive Real Estate Holding Tax Act considers that even if multiple heirs jointly own the deceased’s house by dividing it into certain shares, each is regarded as owning the house individually. However, if the ownership share is 20% or less and the publicly announced price corresponding to the ownership share is 300 million KRW or less, the house is excluded from the count. Only when both conditions are met can the individual maintain the status of a single homeowner without adding to the number of houses owned.

If either of the two conditions is not met, the heir is immediately classified as a multi-homeowner and subject to the 종부세 surcharge. Since there is a significant difference in tax burden between a single homeowner per household and a multi-homeowner with two or more houses under the current 종부세 system, taxpayers who became multi-homeowners through inheritance have expressed strong dissatisfaction.

Accordingly, the government is reportedly considering a plan to more broadly exclude inherited houses when calculating the number of houses during the 종부세 imposition process. Options under discussion include relaxing the criteria for the two conditions or applying the exclusion if only one of the two conditions is met.

This reform does not require a legislative amendment and can be applied solely through a revision of the Enforcement Decree by the government. It may be revised and applied as early as the beginning of next year. However, it seems difficult to apply the changes retroactively to 종부세 already imposed this year.

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