"Excess Tax Revenue of 60 Trillion Won... Due to Failure of Real Estate Policy"

People Power Party Analyzes National Tax Service Data
Capital Gains Tax and Others Double Compared to Predictions

Apartments in Seongsu and Gangnam areas as seen from the 63 Square Observatory in Yeouido, Seoul. Photo by Jinhyung Kang aymsdream@

Last year, an enormous excess tax revenue of 60 trillion won occurred, which has been pointed out to be due to real estate regulatory policies. This is because real estate-related tax revenues such as capital gains tax, inheritance and gift tax, and comprehensive real estate holding tax increased about twice as much as the government's forecast.

According to the data on national tax revenue performance by tax category as of November 2021, received by Rep. Yoo Kyung-jun, head of the People Power Party's Real Estate Public Price Center, from the National Tax Service on the 20th, the tax category with the highest increase rate compared to the original budget was capital gains tax. The Ministry of Economy and Finance predicted capital gains tax revenue at 16.8857 trillion won when preparing the original budget. However, by the end of November, the national tax revenue exceeded twice that amount, reaching 34.3761 trillion won, collecting 17.4904 trillion won more. When including December's performance, the annual capital gains tax revenue is expected to be even higher.

Inheritance and gift tax was forecasted at 9.0999 trillion won in the original budget, but actually collected 14.0459 trillion won by the end of November, which is 1.5 times the original budget. Also, the comprehensive real estate holding tax (종부세) was budgeted at 5.1138 trillion won, but recorded 1.4788 trillion won by the end of November. However, most of the 종부세 payments are made in December. This year's 종부세 billing amount is 8.5681 trillion won, which is 1.7 times the original budget. Adding these together, the excess tax revenue related to real estate alone amounts to about 26.3 trillion won, accounting for 44% of the total excess tax revenue.

The government explained this discrepancy as a result of economic activation despite the COVID-19 pandemic, including corporate profits, exports and imports, and employment. In response, Rep. Yoo stated, "The sharp increase in real estate-related tax revenue is due to the failure of the Moon Jae-in administration's real estate policies," and added, "Securities transaction tax also increased because, due to the skyrocketing real estate prices, people could not buy houses and thus invested money in stocks."

Meanwhile, the securities transaction tax was budgeted at 5.0861 trillion won but actual revenue was 9.4499 trillion won, 1.9 times the budget. Corporate tax was 68.7847 trillion won, 1.3 times the original budget of 53.3054 trillion won, and earned income tax was collected at a level similar to the original budget of 46.6706 trillion won, totaling 46.3036 trillion won.