Record-high tax revenue... "No increased burden on single-homeowners" Government's rare 'ironclad defense' [Comprehensive Real Estate Tax Shock]

[Sejong=Asia Economy Reporter Son Seon-hee] As this year's comprehensive real estate tax (종합부동산세, 종부세) amount was found to be more than three times higher than last year's, the government quickly moved to clarify by stating that 'most taxpayers are multi-homeowners and corporations.' Unlike in the past, the government actively addressed the 'tax bomb' controversy by holding a separate briefing timed with this year's 종부세 notification.

According to the Ministry of Economy and Finance on the 22nd, the total number of people subject to this year's 종부세 on housing was 947,000, with a tax amount of 5.7 trillion KRW. Compared to last year's 667,000 people and 1.8 trillion KRW, the number of taxpayers surged by about 42%, and the tax amount increased by approximately 3.2 times. The tax authorities sent out the 종부세 housing portion tax bills with this information on the same day.

The Ministry of Economy and Finance issued a separate press release and held a briefing on the housing portion of 종부세 excluding land. It is very unusual for the ministry to hold a separate explanation opportunity timed with the 종부세 notification date. Park Geum-cheol, Director of Property and Consumption Tax Policy at the ministry, explained, "98% of the entire population is not subject to taxation," and "Among the notified tax amount of 5.7 trillion KRW, multi-homeowners (individuals owning two or more homes and corporations) bear 88.9%, which is the majority of the tax burden."

He added, "The proportion of single-homeowner households has decreased compared to the previous year, and various measures to protect actual users have kept the tax burden at a relatively low level."

However, this explanation is half correct and half incorrect. For single-homeowner households, the number of people subject to 종부세 increased from 120,000 last year to 132,000 this year. The tax amount also rose from 120 billion KRW last year to 200 billion KRW this year, an increase of about 1.7 times. Thus, even single-homeowner households have seen an increase in both the number of taxpayers and the tax burden.

Of course, it is true that the proportion of single-homeowner households among all 종부세 taxpayers has decreased. However, this is merely an arithmetic result due to the overall surge in the number of 종부세 taxpayers caused by soaring housing prices, and it is difficult to interpret this as a reduction in the tax burden for single-homeowner households. Conscious of this, the government initially explained only based on 'proportion' in their materials but later separately disclosed detailed data including the number of taxpayers and tax amounts after the briefing.

On an individual basis, the number of single-homeowners subject to taxation increased from 176,000 last year to 268,000 this year, an increase of more than 90,000 people, and the tax amount doubled from 200 billion KRW to 400 billion KRW during the same period. In other words, the number of people who are not multi-homeowners but must newly pay 종부세 this year increased by a total of 104,000 compared to last year.

Regarding the increased 종부세 burden even on single-homeowner households, a ministry official said, "Overall housing prices have risen, and the increase in the fair market value also played a role."

However, the government has prepared measures to ease the 종부세 burden on single-homeowner households, including ▲increased deduction amounts ▲elderly deductions ▲special provisions for joint ownership by spouses ▲installment payment system. For seniors aged 60 and over and long-term holders of 5 years or more, the tax burden can be reduced by up to 80%. Also, for single-homeowners jointly owned by spouses, from this year, they can choose the more tax-advantageous option between '1.2 billion KRW deduction' or '1.1 billion KRW deduction + elderly/long-term holding deduction method.'

Additionally, if the suddenly increased tax amount is burdensome, taxpayers can pay in installments over six months without interest. However, this applies only if the tax amount exceeds 2.5 million KRW.