Hong Nam-ki Expresses 'Cautious Opinion' on Deferred Comprehensive Real Estate Tax Payment System: "Administrative Cost Burden Becomes Too Large"

[Asia Economy Reporter Naju-seok] Hong Nam-ki, Acting Prime Minister, showed a cautious attitude toward the introduction of a tax deferral system that postpones the payment of the comprehensive real estate tax. He pointed out that, besides the tax revenue issues caused by the delayed tax payments, the administrative burden could become too large.

[Image source=Yonhap News]

On the 20th, during the government economic questioning session held at the National Assembly, Hong, responding to a question from Lee Yong-woo, a member of the Democratic Party of Korea, about the introduction of a tax deferral system for the comprehensive real estate tax, expressed a reserved stance, saying, "There are considerable side effects when accumulated taxes are paid upon selling the house far in the future."

Lee asked, "I have previously suggested introducing a tax deferral system for households without cash flow among comprehensive real estate tax payers aged 60 or older in single households," and inquired, "What do you think about introducing a tax deferral system for those whose tax burden increases as the official land price realization rate rises?"

In response, Acting Prime Minister Hong said, "The cost of tax payment becomes too high," and explained, "The tax authorities, namely the National Tax Service, require collateral setting, and taxpayers must endure the inconvenience of setting such collateral. Additionally, there are administrative costs involved in the subsequent tax payment process, the cost burden if the housing price does not continue to rise but falls, and side effects such as succession issues when the house is traded."

He added, "Rather than the tax revenue aspect (of deferred tax payment), the side effects from an administrative perspective need to be carefully examined, so the officials are quite cautious," and stated, "We will look into this issue, but it is difficult to speak confidently about it."