Posted November. 15, 2008 09:41,
With the Constitutional Court ruling as partially unconstitutional the comprehensive real estate tax imposed on an long-time owner of a single home, owners of higher-end homes are expected to be exempt from the tax starting this year.
Tax refunds worth a combined 630 billion won (451 million U.S. dollars) will go to 200,000 households who paid more than tax than needed due to the household-based taxation system, something which was also ruled unconstitutional.
In an interview with The Dong-A Ilbo, Choi Kyung-hwan, the head of the ruling Grand National Partys policy coordination committee, said, Owners of one home who have owned their residences for a prolonged period will face lower comprehensive property taxes from this year. Since it takes time to revise relevant laws, the government is likely to collect tax in accordance with the current tax rate and refund the tax.
The party will repay this years comprehensive property tax to long-term homeowners, unlike repayment for homeowners who paid tax under the household-based tax system. If the Constitutional Court decides a case is partly unconstitutional, it cannot be retroactively applied.
Also under consideration is a tax cut for those who have owned a home for more than three years. The cut could reach up to 80 percent for a homeowner who has owned his or her home for ten years, or eight percentage points per year.
The ruling party will also change the standards on the tax base since a married couple that has two homes worth a combined 600 million won (429 million dollars), or one owned by the husband and the other by the wife, are exempt from the comprehensive property tax in accordance with the Constitutional Courts ruling against the household-based tax system.
Tax refunds are also slated for those under the household-based tax system over the past two years. The refunds for 2006 will reach 220 billion won (157 million dollars) for 120,000 people and that for last year 410 billion won (293 million dollars) for 160,000 people. Considering that certain people qualify in both categories, 200,000 households will benefit from the tax refund.
The National Tax Service will send the application form to those eligible for the refund early next week and send the money by Dec. 15.