Burden from comprehensive real estate tax spreads to non-capital areas

Among taxpayers who are subject to comprehensive real estate tax this year, the proportion of people living in Seoul and metropolitan areas is the lowest since statistics began to be compiled in 2010. The burden from the comprehensive real estate tax is spreading to non-capital areas, with the increase in the comprehensive real estate tax rate soaring more than 700 percent compared to the previous year.

According to the data released by the National Tax Service on Tuesday, about 480,000 homeowners in Seoul faced a combined 2.8 trillion won in comprehensive real estate taxes this year. This accounts for 50.6 percent of those subject to comprehensive real estate tax nationwide and 48.9 percent of the combined amount. Gyeonggi had the second highest number of taxpayers subject to comprehensive real estate taxes and combined amount after Seoul. In Gyeonggi, about 238,000 homeowners faced a combined comprehensive real estate taxes of 1.2 trillion won. These statistics were compiled based on the residence of those subject to taxation. For example, if a resident of Busan owns a property in Seoul, the number of taxable people and the combined amount of tax in Busan will increase.

The Seoul metropolitan area had the highest number of people who received comprehensive real estate tax bills and combined tax amount, but the proportion of capital areas is on the decrease. Last year, Seoul accounted for 58.9 percent of those subject to comprehensive real estate tax nationwide and 65.4 percent of the combined amount. Back in 2010 when related statistics began to be compiled, the proportion of people subject to comprehensive real estate tax was 71.1 percent and combined amount was 74.6 percent in Seoul.

The comprehensive real estate tax is expected to continue to rise next year. This is due to continuing upward trend in the real estate market and an expected increase in posted price of houses and fair market value rate.

The government said it does not plan to further raise comprehensive real estate tax for the time being since it increased the tax rate and the threshold of tax increase this year. The comprehensive real estate tax, however, is expected to be either abolished or strengthened depending on the result of next year’s presidential election. Ruling Democratic Party presidential candidate Lee Jae-myung pledged to introduce a land ownership tax and People Power Party candidate Yoon Seok-youl said he will overhaul real estate tax rules, if elected.


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