Special Deduction for Single-Home Comprehensive Property Tax 'Likely to Fail'... 93,000 People Must Pay Taxes

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Kim Hyewon] The introduction of a special comprehensive real estate tax (종합부동산세) deduction, which would determine the tax burden for first-generation single-homeowners this year, is effectively falling through in the National Assembly. The legislative deadline for the proper notification of the special deduction is approaching in two days on the 20th, but the possibility of a last-minute agreement between the ruling and opposition parties is low. In this case, about 90,000 people who were previously excluded from taxation under the special deduction criteria will ultimately have to pay the comprehensive real estate tax.

According to the National Tax Service on the 18th, in order to reflect the special deduction benefits on this year's comprehensive real estate tax notices, the National Assembly must pass the government's and ruling party's amendment to the Restriction of Special Taxation Act by the 20th. This is because the tax imposition criteria must be finalized and related administrative procedures must begin by that date to issue the tax notices properly.

However, there is no negotiation atmosphere for the special deduction on the comprehensive real estate tax in the National Assembly. The ruling People Power Party proposed introducing the special deduction by raising the fair market value ratio, which determines the tax base for the comprehensive real estate tax, from 60% this year to 70% next year. Meanwhile, the opposition Democratic Party insists that the fair market value ratio should be raised to 80% this year.

If there is no progress by the 20th, the National Tax Service will have no choice but to send out comprehensive real estate tax notices reflecting the current system's basic deduction of 1.1 billion KRW. Among first-generation single-homeowners, about 93,000 people who own homes with official prices between 1.1 billion and 1.4 billion KRW will be included again in the comprehensive real estate tax base. This corresponds to owning one home valued at approximately 1.46 billion to 1.86 billion KRW based on market price (official price realization rate of 75.1%).

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