The proportion of property tax revenue in the Korean government's total income is the highest among member countries of the Organisation for Economic Co-operation and Development (OECD). This means that a significant portion of government revenue has been covered by taxes collected from those who own assets such as land or buildings.

According to the "2025 OECD Government Revenue Sources" report recently released by the U.S. international research think tank Tax Foundation on May 26, the Korean government collected 11.5% of its total government revenue from property taxes as of 2023. Korea's property tax revenue share is the highest among the 38 OECD countries and is more than twice the average of 5.1%. Ten years ago, the figure was 10.6%, ranking third, but it has steadily increased.

원본보기 아이콘

The only other country where the share of property tax revenue exceeds 11%, like Korea, is the United States (11%), which is home to many high-net-worth individuals. This is followed by Israel (10.9%), the United Kingdom (10.5%), Canada (9.9%), and Australia (9.3%). Northern European countries known for high tax rates and strong welfare systems, such as Sweden (2%), Norway (2.9%), and Denmark (3.8%), have property tax shares below the average. In neighboring Japan, the proportion is about 7.9%.

Korea's high property tax burden has
significantly increased tax revenue
since the introduction of the comprehensive real estate tax in 2005,
as housing prices rapidly rose mainly in the metropolitan area.

The comprehensive real estate tax amount, including housing and land,
was only 1.7 trillion won in 2017,
but rose to 7.3 trillion won in 2021,
more than tripling in just four years.

Korea's high property tax burden is closely linked to the real estate market. Since the introduction of the comprehensive real estate tax in 2005, tax revenue has increased significantly as housing prices have rapidly risen, especially in the metropolitan area. The comprehensive real estate tax amount, including both housing and land, was only 1.7 trillion won in 2017, but increased to 7.3 trillion won in 2021, more than tripling in just four years. Although the figure declined to 6.7 trillion won in 2022 and 4.7 trillion won in 2023, it still accounts for a significant portion of total tax revenue.

On the other hand, Korea's share of consumption tax stands at 22.6%, ranking 35th. Excluding countries such as the United States (16.8%), which does not have a value-added tax, Korea is effectively at the bottom. OECD countries collect an average of 31.1% of their revenue from consumption taxes. After the global financial crisis in 2008, 25 OECD countries raised their value-added tax rates to address fiscal deficits, but Korea has maintained its 10% rate for 48 years since its introduction in 1977.

The proportion of income tax paid by individuals is also 19.8%, lower than the OECD average of 23.7%, ranking 25th. Countries with a lower share of income tax than Korea include Japan (18.8%), where wages have stagnated for a long time, and developing countries such as Chile (9.3%), Colombia (7.4%), and Costa Rica (5.7%).

The fact that the property tax burden is high while the shares of income and consumption taxes are low indicates that Korea's tax revenue sources are concentrated among the wealthy. This means that, instead of the entire population paying small amounts of tax, those with more wealth are bearing a disproportionately heavy tax burden. An official from the Ministry of Economy and Finance stated, "Although Korea has rapidly expanded its welfare system, in reality, we have not attempted to reduce the proportion of wage earners exempt from income tax or to increase the value-added tax rate," adding, "It is true that the principle of universal taxation (the idea that all citizens should pay at least a small amount of tax) is becoming increasingly difficult to achieve."