This Year’s 'Property Tax for Single-Home Owners' Down 5% Compared to Last Year... Multi-Home Owners and Corporations Up 21%

Fair Market Value Ratio Reduced from 60% to 45%, Easing Tax Burden for Genuine Home Buyers

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[Asia Economy Reporter Lim Cheol-young] As a result of local governments' property tax assessments in July, the property tax amount for single-homeowners this year decreased by nearly 5% compared to last year, while for multi-homeowners and corporations, it increased by 21%.

On the 1st, the Ministry of the Interior and Safety announced that this year's property tax amount for single-homeowners decreased by 173.3 billion KRW (4.9%) from last year to 3.3336 trillion KRW, whereas for multi-homeowners and corporations, it increased by 583.7 billion KRW (21.1%) to 3.3502 trillion KRW.

In the new government's economic policy direction announced on June 16, to normalize the real estate market, it was decided to lower the fair market value ratio from 60% to 45% to reduce the average tax burden on single-homeowners due to this year's increase in official property prices back to the 2020 level before the price surge. Accordingly, the fair market value ratio was lowered through the revision of the Local Tax Act Enforcement Decree on June 30, and as a result, the tax burden for single-homeowners this year decreased by 146.9 billion KRW compared to the estimated 3.4805 trillion KRW tax amount in 2020.

The Ministry of the Interior and Safety explained, "This year, single-homeowners account for 9.89 million households, which is 51% of the total 19.41 million housing units, and due to the reduction in the fair market value ratio, a tax burden reduction of 650 billion KRW occurred, along with an additional 494.6 billion KRW reduction from the application of special tax rates for amounts under 900 million KRW, resulting in a total tax benefit of 1.1446 trillion KRW. Despite the sharp increase in official property prices this year, the tax burden decreased compared to 2020 and 2021." In particular, among single-homeowners, 5.71 million households (59.3%) out of 9.64 million individual taxpayers with tax amounts in 2021 experienced a reduction in tax burden compared to the previous year.

For multi-homeowners and corporations, who do not receive tax benefits such as the reduction of the fair market value ratio, the number of taxable housing units this year is 9.52 million, and the total tax amount is 3.3501 trillion KRW, an increase of 583.7 billion KRW (21.1%) compared to 2021. As a result, the total property tax revenue from all housing units reached 6.6838 trillion KRW, an increase of 410.4 billion KRW (6.5%) from last year.

Minister Lee Sang-min said, "In this difficult economic situation, the reduction of the fair market value ratio and the additional application of special tax rates have somewhat eased the tax burden for single-homeowners who are actual users of housing," and added, "We will continue to operate the property tax system stably to ensure housing stability for actual users and low-income households."

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