[Yoon Seok-yeol Elected] Tax Burden Likely Reduced for Both Single-Homeowners and Multi-Homeowners

President-elect Yoon Suk-yeol is visiting the People Power Party's vote counting situation room set up at the National Assembly Library in Yeouido, Seoul, on the 10th to celebrate his victory ceremony. Photo by Yoon Dong-ju doso7@

[Asia Economy Reporter Kim Hye-min] With Yoon Seok-yeol, the People Power Party candidate, winning the 20th presidential election, comprehensive changes in real estate taxation are expected. Unlike the Moon Jae-in administration, which strengthened both holding and transaction taxes, President-elect Yoon has put "burden reduction" at the forefront.

President-elect Yoon has pledged to effectively ease all real estate taxes. The scope of tax reductions covers acquisition tax paid when buying real estate, capital gains tax paid when selling, as well as holding tax including the comprehensive real estate holding tax (종부세).

Notably, President-elect Yoon announced plans to integrate the comprehensive real estate holding tax (종부세) with property tax and effectively abolish it. This reflects market criticism that the 종부세, which applies differential tax rates based on the number of houses owned, is a punitive tax. The 종부세 is levied on single homeowners with a publicly announced housing price exceeding 1.1 billion KRW and multi-homeowners with properties exceeding 600 million KRW.

However, implementing this pledge carries challenges. The 종부세, a national tax, is fully allocated to local governments and is designed to provide more resources to financially disadvantaged regions. If integrated with the local property tax, tax revenue could concentrate in the Seoul metropolitan area, where high-priced homes are prevalent, potentially causing regional imbalances. Opposition from local governments is expected during the process.

Therefore, candidate Yoon considers this pledge a long-term goal and currently aims to improve the system by reducing tax burdens. He proposed freezing the fair market value ratio, which affects the increase in publicly announced prices, and lowering the "tax burden cap" that prevents 종부세 from increasing beyond a certain level compared to the previous year's payment. He also plans to reduce the tax rate for single homeowners to the level before the current administration and allow long-term single homeowners to defer payment until the time of sale or inheritance regardless of age.

To ease transaction taxes, a plan to defer the application of heavy capital gains tax on multi-homeowners for up to two years is also being pursued. This contrasts with candidate Lee's pledge, which applies differentiated exemption rates depending on the period. Additionally, Yoon has proposed unifying acquisition tax rates and easing progressive tax rates on two or more homes in regulated areas to reduce acquisition tax burdens.