Institutional Basis Established for Property Tax Reduction for Single-Home Owners through Ordinance Amendment...Owners of Single Homes Under 900 Million KRW to Receive Average Refund of About 100,000 KRW, Ranging from Under 10,000 KRW to Up to 450,000 KRW...Seocho's 'Prepared Administration' Bears Fruit...Immediate Provision of Single-Home Data to Ministry of Land, Infrastructure and Transport, with Total 6.3 Billion KRW Property Tax Refund Planned Within This Year...District Mayor Joeunhee: "Though Benefits Are Small, I Will Do My Best as District Mayor. Government and Other Local Governments Should Join to Quickly Wipe Away the Tears of Citizens Suffering from Tax Burden"
[Asia Economy Reporter Park Jong-il] Seocho-gu (Mayor Cho Eun-hee)'s 'One Household One Homeowner' property tax burden reduction through the 'Partial Amendment to the Seoul Special City Seocho-gu Local Tax Ordinance' was passed at the district council plenary session on the 25th.
As a result, Seocho-gu will be the only district among the 25 districts of Seoul to implement property tax refunds within this year.
The 'Partial Amendment to the Seoul Special City Seocho-gu Local Tax Ordinance' includes a provision to reduce the 2020 property tax rate by 50% for owners of a single home with a standard market value of 900 million KRW or less.
Homes valued over 900 million KRW are excluded as the government collects comprehensive real estate tax (종부세) on them, so there is no practical benefit from the reduction.
With the institutional basis for property tax reduction established, the district will refund property tax worth up to 6.3 billion KRW to single-home owners of homes valued at 900 million KRW or less, which accounts for 69,145 households or 50.3% of the 137,442 households in the district.
The 50% reduction applies only to the local tax portion of the property tax levied by the district, excluding the Seoul city portion.
Since the jointly levied tax portion paid to Seoul city remains unchanged, there will be no reduction in the shares of other districts.
Single-home owners in Seocho-gu with homes valued at 900 million KRW or less will receive refunds ranging from less than 10,000 KRW to a maximum of 450,000 KRW, averaging about 100,000 KRW. Going forward, the district plans to request data related to one-home households from the Ministry of Land, Infrastructure and Transport to finalize the eligible recipients for the property tax rate reduction. Currently, local governments cannot verify whether a household owns only one home. However, the National Tax Service imposes comprehensive real estate tax based on June 1, the same date as the property tax assessment, and the Ministry of Land, Infrastructure and Transport provides the necessary one-home household data.
Therefore, the district plans to formally request the relevant data from the Ministry of Land, Infrastructure and Transport as soon as possible. If the government does not provide the data, the district is also considering accepting applications directly from one-home taxpayers.
Additionally, the district will request Seoul city to develop a function in the tax comprehensive system, the local tax levy and collection system, to allow the property tax rate reduction to apply only to the district tax portion.
So far, Seocho-gu has been the only district among Seoul's 25 districts to pursue property tax reductions.
This year, due to the economic downturn caused by the COVID-19 disaster and the government's adjustment of official property prices, the property tax increase rate has been higher than in any other year, intensifying the tax burden on citizens.
In Seocho-gu, the official price of apartment complexes surged by 22.5% this year, causing the property tax payment for housing to increase by 72% over the past three years. As a result, even one-home households unrelated to real estate speculation, including middle-class citizens, have faced a tax bomb, leading to over 1,000 complaints and appeals flooding the district office daily.
◆Contents of Critical Calls
· "Our family of four has lived in the same house for over 10 years without speculation purposes, but the property tax has risen too much, and with the difficult economy and children unable to find jobs, I feel like I might have a heart attack from worry." (Lee OO, resident of Bangbae-dong)
· "I am an elderly long-term one-home owner with no income, and I might have to sell my house to pay taxes. Please reduce taxes for long-term one-home owners, elderly people, and those over 70." (Park OO, resident of Yangjae-dong)
In response, the district judged that punitive taxation on one-home owners who are not involved in real estate speculation is problematic and has been preparing step-by-step based on Article 111, Paragraph 3 of the Local Tax Act, which allows the district head to reduce property tax by 50% for the relevant year in cases of disasters or similar situations.
On the 31st of last month, Seocho-gu proposed a property tax reduction plan to the Seoul Mayors' Council, asking all 25 districts to participate together, but it was rejected by a vote of 24 to 1. Even districts where 70-80% of homes are valued at 900 million KRW or less refused Seocho-gu's proposal to alleviate the suffering of ordinary citizens. The Mayors' Council even issued an unusual statement saying, "One-home property tax reduction does not help disaster recovery," and after much difficulty, Seocho-gu proceeded alone with the property tax reduction by a 1 to 24 vote.
Seocho-gu Mayor Cho Eun-hee said, "The benefit amount ranges from 10,000 KRW to 450,000 KRW, averaging about 100,000 KRW, which is very small, and I apologize. We have done the maximum possible within the legal framework," and added, "I hope Seocho-gu's initiative will serve as a catalyst for other districts to join."
She also urged, "I hope the Ministry of Land, Infrastructure and Transport will promptly provide one-home data and that the government will quickly implement property tax rate reductions to wipe away the tears of citizens suffering from taxes."
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