Non-Gangnam residents take up more than half of taxpayers subject to comprehensive real estate holding tax in Seoul

Those living in the Gangnam area, notably known as the wealthiest neighborhood in South Korea, have been outnumbered by non-Gangnam residents in terms of the number of taxpayers who are supposed to pay the comprehensive real estate holding tax due to their possession of house units in Seoul for the first time, according to a study. An increase of 60,000 taxpayers living outside of the capital area levied the corresponding tax. The taxpayer bracket concerning the comprehensive real estate holding tax seems to be spreading beyond the Gangnam region and the capital area.

The number of taxpayers living in the four districts of the Gangnam area (Gangnam, Seocho, Songpa, and Gangdong Districts) who are required to pay the comprehensive real estate amount to 285,000 based on the analysis of the National Tax Service’s report on the notification of the tax in question as of this year which released on Wednesday by People Power Party Rep. Ryu Sung-gul, a member of the National Assembly's Strategy and Finance Committee. It only accounts for 48.8 percent, less than half the total of 580,000 taxpayers in Seoul who have been notified of their payment duty. For the first time, non-Gangnam residents have exceeded those living in the corresponding area in the number of taxpayers subject to the comprehensive real estate holding tax in Seoul since it was first introduced in 2005.

The increase in the tax in question has turned out to be greater outside of the Gangnam area than in the four Gangnam-based districts. Compared to the year 2017 when the Moon administration took office, the tax amount rose 6.6 times as of this year in the four Gangnam districts, while it jumped as much as 9.4 times in the rest of the districts in Seoul. The largest increase has been seen in Geumcheon (27.2 times), followed by Guro (17.9 times), Nowon (16.9 times), Jungnang (16.6 times), and Gangbuk (15.4 times). Regarding the number of corresponding taxpayers during the same period, Gangdong rose 5.2 times from 4,706 to 24,329. Nowon (5 times), Geumcheon (4.7 times), Dobong (4.5 times), and Seongdong (4.4 times) also saw a significant rise as well.

More taxpayers in the Seoul metropolitan area and the rest of the country have been notified that they should pay the comprehensive real estate holding tax than before. As of this year, 258,000 taxpayers outside of the capital area have to pay the corresponding tax for owning houses, 58,000 up one year ago, according to the Ministry of Economy and Finance. Out of the total number of taxpayers notified of their payment duty, the rate of those outside of the capital area has risen from 24.1 percent in 2020 to 27.6 percent last year to 30.9 percent this year. In the country, except for the capital area, Busan has seen the highest increase of 38.6 percent compared to one year ago in the number of notifications issued.


Hye-Ryung Choi herstory@donga.com