Sejong Applies 'Temporary Official Price', Seoul Did Last Year...

Ahead of June Local Elections, Policies Flooded to Win Votes of Single-Homeowners
Tax System in Shambles... "Tax Fairness and Predictability Have Collapsed," Criticism Arises

[Asia Economy Sejong=Reporter Kwon Haeyoung] As the government decided to reuse last year's official property prices to ease the property tax (property tax and comprehensive real estate tax) burden on single-home owners, exceptions are repeatedly made, such as applying this year's official prices in areas like Sejong City where house prices have fallen. Ahead of the June local elections, there are criticisms that the tax system has become patchy due to the excessive issuance of tax benefits to capture the votes of single-home owners. Criticism has been raised that the government is undermining tax principles itself in terms of predictability of tax policy and fairness with multi-home owners.

According to related ministries on the 24th, for single-home owners only, last year's official prices will be applied when calculating this year's property tax and comprehensive real estate tax, but if this year's official prices are the same or lower than last year's, this year's prices will be used as the basis. ▶Related article page 3

This year, the average increase rate of official prices for apartment complexes nationwide is 17.22%, but only Sejong fell by 4.57%. Accordingly, the government’s policy is to apply this year's official prices to individual complexes in Sejong where the official prices have fallen compared to last year, thereby reducing the property tax burden. For example, the property tax for Saerom Saetteum Village Complex 10 (98㎡) in Sejong City is calculated based on this year's newly assessed official price of 925 million KRW, not last year's official price of 933 million KRW.

The government plans to add another exception clause for cases like Sejong when revising the Restriction of Special Taxation Act (RSTA) to apply the 2021 official prices when calculating the tax base for single-home owners’ property tax and comprehensive real estate tax this year. A Ministry of Strategy and Finance official said, "We will newly establish a provision in the RSTA to apply the 2021 official prices when calculating the 2022 property tax, and if the official price falls, we will add a proviso to use the 2022 official prices." This means adding an 'exception to the exception' clause in the RSTA. Furthermore, there are criticisms that tax fairness has collapsed as multi-home owners are excluded from the property tax relief benefits, creating discrimination based on the number of homes.

Professor Hong Kiyong of the Department of Business Administration at Incheon National University said, "Tax policy should have consistency and predictability, but the government has made the tax system a mess by increasing uncertainty. This kind of sloppy, time-limited policy has come out as a result of focusing only on winning votes ahead of the election, and a comprehensive reform of the property tax system is urgently needed."

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