[What Do You Think] Property Tax Cuts Only for Seocho Residents... Seoul City Says No

"Relief of Residents' Tax Burden Amid COVID-19" vs "District Office Arbitrarily Interprets Property Tax Law"

Jo Eun-hee, Seocho District Mayor

[Asia Economy Reporter Jo In-kyung] When Seocho-gu, Seoul announced that it would cut half of the local government portion of property tax for single-home households with a publicly announced property price of 900 million won or less, Seoul city intervened, claiming it was illegal, sparking a standoff between the two sides. Seocho-gu’s intention to ease the burden on residents amid difficult economic conditions clashes with Seoul city’s stance that benefits cannot be given to only one specific district, hinting at a potential legal and political conflict.

According to Seoul city and Seocho-gu on the 17th, the Seocho-gu council passed an ordinance on the 25th of last month to reduce property tax by 25% for some residents. As a result, about half of the residents who own a single home with a standard market price of 900 million won or less received a maximum tax reduction benefit of 450,000 won.

Seocho-gu explained that the ordinance was enacted because the economic difficulties caused by the COVID-19 pandemic and the adjustment of publicly announced real estate prices increased the property tax burden on ordinary citizens. Seocho-gu Mayor Cho Eun-hee personally pushed for the property tax reduction plan, judging the COVID-19 situation as a disaster under the Local Tax Act, which allows local governments to reduce property tax by 50% in disaster situations.

However, Seoul city viewed Seocho-gu’s attempt to create a new tax base bracket not stipulated in the higher Local Tax Act as potentially illegal and requested the Seocho-gu council to reconsider. Seoul city also opposed the ordinance because it significantly benefits owners of high-priced homes while excluding non-homeowners, violating tax fairness.

At the National Assembly’s Public Administration and Security Committee’s Seoul city audit on the 15th, Acting Mayor Seo Jeong-hyeop said, "Although this was discussed at the Council of District Mayors, the other 24 districts do not agree, so it is unfair for only Seocho-gu to proceed," adding, "I believe property tax reductions should be pursued as a central government policy."

Seo Jeong-yeop, Acting Mayor of Seoul, is responding to questions from lawmakers at the National Assembly's Public Administration and Security Committee audit held at Seoul City Hall on the morning of the 15th.
[Image source=Yonhap News]

However, on the same day, Seocho-gu held a meeting of its advisory group, including lawyers and tax accountants, concluding that the ordinance has no issues. Seocho-gu argues that since the ordinance does not create a new tax bracket to impose taxes but rather grants a reduction, it does not violate the law. Mayor Cho Eun-hee is expected to meet with Acting Seoul Mayor Seo Jeong-hyeop next week and then promulgate the ordinance.

Seocho-gu’s actions have sparked controversy around Seoul and in political circles. At the audit, Lee Hae-sik, a member of the Democratic Party of Korea, criticized, "Seocho-gu Mayor is arbitrarily interpreting the Local Tax Act due to political ambition," calling it "political populism exploiting Seocho-gu’s superior financial situation."

On the other hand, Kim Yong-pan of the People Power Party said, "President Moon Jae-in also said he would actively consider tax reductions," and added, "I hope Seoul city sits down with Seocho-gu and reduces property tax for ordinary citizens according to local circumstances."

Seoul city plans to respond legally by filing an injunction to suspend the ordinance’s effect immediately upon its promulgation by Seocho-gu and proceeding with a nullification lawsuit.

This content was produced with the assistance of AI translation services.