Temporary Relief on Comprehensive Real Estate Tax Burden for Two-Homeowners, Elderly, and Long-Term Holders Agreed... Special Deduction Excluded (Comprehensive)

Prospect of Passing in the Plenary Session on the 7th

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho (left) and Bank of Korea Governor Lee Chang-yong are attending the plenary meeting of the Planning and Finance Committee held at the National Assembly in Yeouido, Seoul on August 1, 2022. 2022.8.1 Photo by National Assembly Press Photographers [Image source=Yonhap News]

[Asia Economy Reporters Hyunju Lee and Juni Park] A bill to reduce the comprehensive real estate tax burden for temporary two-homeowners, elderly homeowners, and long-term single-homeowners passed the relevant standing committee on the 1st.

The National Assembly's Planning and Finance Committee held a plenary meeting that morning and passed a partial amendment to the Comprehensive Real Estate Tax Act.

The passed amendment excludes temporary two-homeowners from the housing count and allows elderly and long-term single-homeowners to defer the payment of the comprehensive real estate tax.

The amendment to the Restriction of Special Taxation Act, which included provisions on the fair market value ratio and special deduction amounts?issues that initially caused disagreements between the ruling and opposition parties?did not pass. The ruling party and government had previously proposed lowering the fair market value ratio from the originally planned 100% to 60% and raising the tax base threshold from the current official appraisal price of 1.1 billion KRW to 1.4 billion KRW, aiming to revert the comprehensive real estate tax burden for single-homeowners to the 2020 level.

However, as the Democratic Party expressed negative views, calling it a "tax cut for the wealthy," and delayed the bill's passage, the People Power Party proposed a compromise during negotiations to lower the special deduction amount to 1.2 billion KRW. Despite this, the Democratic Party insisted on raising the fair market value ratio further, and no agreement was reached, resulting in the failure to pass the Restriction of Special Taxation Act amendment. Planning and Finance Committee Chairman Park Dae-chul told reporters before the plenary meeting that "the unresolved parts related to the Restriction of Special Taxation Act will be handled on the condition that they can be implemented this year."

The ruling and opposition parties agreed to first process the agreed amendments on the day and continue discussions with the goal of agreeing to implement the Restriction of Special Taxation Act amendments within this year. At the meeting, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho said, "We requested that a conclusion be reached by the end of August at the latest so that we can proceed with various tax administration procedures such as guidance and notification. If the comprehensive real estate tax is refunded later, additional interest must be paid, which places an extra burden on the national treasury," he explained.

The amendment to the Comprehensive Real Estate Tax Act, which passed the Planning and Finance Committee plenary meeting that day, is expected to be finally approved after a vote in the plenary session on the afternoon of the 7th.

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