Ruling and Opposition Agree to Ease Comprehensive Real Estate Tax Burden for Temporary Two-Homeowners and Elderly... Special Deduction Fails

Sudden Agreement Ahead of Plenary Session
Disagreement Remains on Special Tax Law Amendment
Park Dae-chul: "To Be Processed on Condition of Execution This Year"

[Image source=Yonhap News]

[Asia Economy Reporters Hyunju Lee and Boryeong Geum] On the 1st, the ruling and opposition parties reached a sudden agreement to pass a bill that reduces the comprehensive real estate holding tax (종합부동산세, 종부세) burden only for temporary two-homeowners, elderly homeowners, and long-term single-homeowners.

The ruling and opposition party coordinators of the National Assembly's Planning and Finance Committee announced that they made this decision after meeting at the National Assembly that morning.

The agreed amendment to the Comprehensive Real Estate Holding Tax Act excludes temporary two-homeowners from the housing count and allows elderly and long-term single-homeowners to defer paying the 종부세.

However, the amendment to the Restriction of Special Taxation Act, which includes issues such as the fair market value ratio and special deduction amounts where opinions differed, was not agreed upon. Park Dae-chul, chairman of the Planning and Finance Committee, told reporters before the plenary session that day, "We decided to handle the unresolved parts related to the Restriction of Special Taxation Act on the condition that they can be implemented this year."

As a pledge of President Yoon Suk-yeol, the government and ruling party proposed lowering the fair market value ratio from the originally planned 100% to 60% and raising the tax base for 종부세 from the current 1.1 billion KRW to 1.4 billion KRW, aiming to restore the 종부세 burden for single-homeowners to the 2020 level. However, when the Democratic Party expressed negative views, calling it a "tax cut for the rich," a compromise was proposed during negotiations to lower the special deduction amount to 1.2 billion KRW. Nevertheless, the Democratic Party insisted on raising the fair market value ratio further, and no agreement was reached.

Therefore, the ruling and opposition parties decided to first pass the amendment to the Comprehensive Real Estate Holding Tax Act on that day and continue discussions later with the goal of agreeing to implement the Restriction of Special Taxation Act amendment within this year.

The amendment to the Comprehensive Real Estate Holding Tax Act is expected to be processed at 11 a.m. in the Planning and Finance Committee's plenary session and the Legislation and Judiciary Committee, followed by the plenary session in the afternoon.

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