Aggregate Land Tax Set for Increase

The aggregate land tax, set to be levied this October, is expected to increase by an average of 29.8 percent as compared to last year.

Each tax payer will have to pay an average of 31,000 won more than last year for the aggregate land tax.

On May 10, the Ministry of Government Administration and Home Affairs (MOGAHA) announced a proposal for new standards on land levies, with a three percent increase from last year. Local districts, however, are allowed to adjust their increase rate between two and five percent.

MOGAHA anticipates that the aggregate land tax will increase by 29.8 percent on average, with a 12.3 percent increase on the posted land price and a three percent increase on the standard rate of levy on land.

The total sum of the collected aggregate land tax is expected to increase by 492.1 billion won, reaching 2,142 billion won this year. The levy on each taxpayer will increase by 31 thousand won on average to reach 135 thousand won.

The levy on land in Seoul in particular, where the posted land price was increased by 25.7 percent, will increase by fifty percent if the three percent increase rate is applied. MOGAHA expects that the aggregate land tax in Gangnam, Seocho, and Songpa will increase by 65 percent as compared to last year.

The levy on land owners in Gyeonggi and the other provinces is expected to increase by approximately thirty percent and ten to twenty percent, respectively.

According to the policy decided on last year, MOGAHA will increase the levy standard by three percent per year from 2004, which will raise the rate of levy on land from 36.1 percent last year to 50 percent by 2006.

Hyun-Doo Lee ruchi@donga.com