The Share of Comprehensive Real Estate Tax Compared to National Tax Surpasses 1% for the First Time... Taxpayers Increase by 80% Under Moon Administration

National Assembly Budget Office Publishes '2021 Republic of Korea Taxation' Report

[Sejong=Asia Economy Reporter Son Sun-hee] The proportion of comprehensive real estate tax (종합부동산세, Jonghap Budongsan Se) among total national taxes exceeded 1% for the first time last year. This means that the comprehensive real estate tax increased much more steeply compared to other tax categories. Since the inauguration of the Moon Jae-in administration, the number of individuals and corporations subject to the comprehensive real estate tax has surged by nearly 80%.

According to the '2021 Korea Taxation' report published by the National Assembly Budget Office on the 25th, the amount collected from the comprehensive real estate tax last year was 3.6 trillion won, accounting for about 1.3% of the total national tax revenue (285.5 trillion won). The annual collection amount, which was less than 1.5 trillion won until 2016, showed a sharp upward trend starting in 2017 when the Moon Jae-in government took office and housing prices skyrocketed. Compared to the 2016 collection amount (1.3 trillion won), it nearly tripled in just four years. The report analyzed this as "an effect of the increase in publicly announced property prices and policies strengthening tax burdens on multiple homeowners."

The number of comprehensive real estate tax payers also showed an increasing trend. In 2019, the number of taxpayers was 592,008, which increased by 27.7% in just one year. Compared to the number of taxpayers in 2016 (335,591), it increased by about 76% since the current administration took office.

The report explained, "The number of taxpayers showed an annual growth rate of about 12-18% since 2016, but in 2019, due to the rise in publicly announced property prices and the strengthening of tax burdens mainly on multiple homeowners, it showed a higher growth rate than usual. When divided into individuals and corporations, as of 2019, individuals accounted for 558,205 (94.3%) and corporations 33,803 (5.7%), with individuals making up the majority."

The comprehensive real estate tax is imposed on the excess amount when the total publicly announced property price of real estate such as houses and land held by an individual as of the tax base date (June 1 every year) exceeds a certain standard amount. However, in the case of this year, the ruling party and government have set a policy to impose the comprehensive real estate tax only on the "top 2%" of one-household-one-homeowners, so the tax base amount has not yet been finalized.