Real estate tax expected to slightly rise next year

Korea’s real estate ownership tax (property tax + comprehensive real estate tax) is expected to remain at similar levels or rise slightly next year. This comes from the government’s decision to freeze the price rationalization rate (ratio of publicly announced price to market price) at the 2020 level, the same as this year, resulting in holding tax adjustment to reflect market price changes only.

The Ministry of Land, Infrastructure and Transport announced on Tuesday that such measures were determined by the Central Real Estate Price Public Disclosure Committee under “measures to re-establish the plan to rationalize publicly announced real estate prices.” As a result, the rationalization rate of publicly announced prices for apartments and other joint housing facilities for next year will average 69.0%, the same as this year and 6.6% points lower than the plan (75.6%). The ratio for single-family homes and land remains unchanged at 53.6% and 65.5%, respectively.

The roadmap for rationalizing publicly announced prices is being reexamined, including the possibility of scrapping the plan. The Ministry of Land plans to conduct research in January next year to review the necessity and feasibility of the roadmap and devise a plan to revamp the plan following the research results after July next year. “Tax burden is not likely to increase sharply due to unchanged rationalization rates, but we need to establish guidelines for tax predictability quickly,” said Song In-ho, chief of the Economic Information Center at the Korea Development Institute (KDI).


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