Property Tax on Houses with Standard Price Over 600 Million Won To Increase

Even for a house with a standard market price below 900 million won set by the National Tax Service and thereby exempted from the composite real estate tax for next year, its property tax will increase up to about 50 percent compared to this year if its price exceeds 600 million won.

Kim Ki-tae, deputy director of real estate working team at the Ministry of Finance and Economy, said on November 7, “Even if a house’s price is below 900 million won and currently exempt from the composite real estate tax, its property tax rate levied by its local government will be increased even by a small rate, except for those houses at the lowest bottom level price.”

The Ministry of Finance and Economy and the Ministry of Government Administration and Home Affairs will announce the specific tax rating system with two or three levels on November 10, decreased from the former six levels. The new system will apply high tax rate to houses exceeding a certain standard price.

Therefore, houses with a standard market price over 6 million won, classified a high-priced house, will be applied a high tax rate.

In addition, houses with relatively lower tax-levying standard compared to the standard market price will have to face an increased tax rate.

In these cases, however, the increased limit will be set so that it does not exceed 50

In addition, it was known that the new system will specify the conditions of house rental businesses that receive exemptions from the taxation of the composite real estate tax. The conditions include five years of business and renting out more than five houses.

In this case, businesses with less than five years old or owning less than five houses will be responsible for the composite real estate tax, which is expected to face some controversies.

Ji-Wan Cha cha@donga.com