[7·10 Real Estate Measures] 'Aripak + Jamsil Jugong 5' Two-Home Owners Face 170 Million Won Jump in Property Tax

[Asia Economy Reporter Park So-yeon]The government has announced a tax increase plan to raise the maximum comprehensive real estate holding tax rate for multi-homeowners from the current 3.2% to 6.0% in the July 10 measures, which is expected to significantly increase the holding tax burden for multi-homeowners.

In the December 16 measures last year, the government raised the comprehensive real estate holding tax rate by 0.1 to 0.3 percentage points for single-homeowners, and by 0.2 to 0.8 percentage points for three-homeowners and two-homeowners in regulated areas. It also decided to raise the previous year's tax burden cap for two-homeowners, which was previously 200%, to 300%, the same as for three-homeowners.

However, since the tax law containing these provisions did not pass the National Assembly, on the 10th, the government strengthened the content by raising the additional tax rates by 0.6 to 2.8 percentage points by tax base bracket, applying rates from 1.2% to 6.0%, higher than the current rates.

According to the industry, Mr. A, who owns two apartments including an 84.5㎡ (29th floor) unit in Mapo Raemian Prugio and an 84.4㎡ (6th floor) unit in Eonma Apartment in Daechi-dong, Gangnam-gu, will see his total holding tax increase from 29.67 million KRW this year to 68.11 million KRW next year, a rise of 38.44 million KRW.

Since all areas of Seoul are designated as regulated areas, the proposed comprehensive real estate holding tax rate increase will apply to two-homeowners as well.

This year, the publicly announced price of Raemian Prugio is 1.0176 billion KRW, and that of Eonma Apartment is 1.533 billion KRW, totaling 2.5506 billion KRW for the two apartments. The simulation assumed a 10% increase in the publicly announced price next year.

Mr. A will pay 18.57 million KRW in comprehensive real estate holding tax this year, along with 4.44 million KRW in property tax, 3.71 million KRW in special rural tax, and 890,000 KRW in local education tax. However, next year, the comprehensive real estate holding tax will jump to 49.32 million KRW, and property tax (5.47 million KRW), special rural tax (9.86 million KRW), and local education tax (1.09 million KRW) will all increase.

In this measure, the government raised the comprehensive real estate holding tax rate for tax bases of 300 million KRW or less from the current 0.6% to 1.2%, 300 million to 600 million KRW from 0.9% to 1.6%, 600 million to 1.2 billion KRW from 1.3% to 2.2%, 1.2 billion to 5 billion KRW from 1.8% to 3.6%, and 5 billion to 9.4 billion KRW from 2.5% to 5.0%, and the calculation was made applying these rates.

Mr. A's comprehensive real estate holding tax increase rate next year is expected to reach 165.6%.

Mr. B, who owns two apartments including a 112.9㎡ (21st floor) unit in Acro River Park, Banpo-dong, Seocho-gu, and an 82.5㎡ (10th floor) unit in Jamsil Jugong 5 Complex, Songpa-gu, is expected to see his holding tax rise from 75.48 million KRW this year to 169.69 million KRW next year, more than doubling.

The publicly announced price of Acro River Park is 3.097 billion KRW, and that of Jamsil Jugong 5 Complex apartment is 1.65 billion KRW, totaling 4.747 billion KRW for the two apartments.

Due to the rise in publicly announced prices and tax rate increases, Mr. B's comprehensive real estate holding tax will jump from 75.48 million KRW this year to 126.48 million KRW next year, more than doubling his holding tax burden. Mr. B's comprehensive real estate holding tax increase rate next year is 155.8%.