'Housing Quantity → Value'... Government Revises Comprehensive Real Estate Tax Including 'Abolition of Multi-Homeowner Heavy Taxation'

[Image source=Yonhap News]

[Asia Economy Son Sun-hee (Sejong), Goo Chae-eun Reporter] The government is also considering reforming the comprehensive real estate tax (종부세, Jongbu-se) alongside income tax. The main points include abolishing the excessive heavy tax rates on multi-homeowners and shifting the tax imposition criteria from the number of houses to the ‘value’ basis.

According to the Ministry of Economy and Finance on the 14th, this comprehensive real estate tax reform plan is expected to be included in the ‘2022 Tax Reform Bill’ to be announced on the 21st. Under the previous Moon Jae-in administration, punitive heavy taxation on multi-homeowners caused cases where two-homeowners with smaller real estate assets were taxed more than single homeowners with high-value properties worth billions of won, resulting in distorted tax fairness.

Accordingly, under the policy direction of ‘normalizing real estate taxation,’ the government is strongly considering abolishing the existing heavy tax rates based on the number of houses and switching to a method of taxing based on the total value of real estate assets held by each individual. Benefits such as special deductions for elderly and long-term holders among single-homeowners will be maintained as they are.

However, since the ‘heavy taxation on multi-homeowners’ was a core policy of the previous government’s real estate policy, the government is reportedly also considering a phased reform that maintains the overall framework while adjusting the heavy tax rates on multi-homeowners, anticipating opposition from opposition parties.

Earlier, the government announced that it would lower the comprehensive real estate tax rates for single homeowners (0.6?3.0%) back to the levels before the Moon Jae-in administration (0.5?2.0%) and freeze this year’s comprehensive real estate tax at last year’s level.

Meanwhile, the opposition party, the Democratic Party of Korea, is also preparing to propose a bill to ease the comprehensive real estate tax. Representative Park Seong-jun is preparing to propose the ‘Partial Amendment to the Comprehensive Real Estate Tax Act,’ which raises the tax threshold for single-homeowners from the current 1.1 billion won to 1.5 billion won. This is a more relaxed level than the ruling party’s proposed threshold of 1.4 billion won. Representative Park’s bill also includes provisions allowing elderly single-homeowners (aged 60 and above) who reside in their homes to defer taxation until inheritance or gift transfer.

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