'Houses Priced Under 300 Million Won in Local Areas Excluded from Property Tax Calculation'

Ministry of Economy and Finance Announces Legislative Notice for Amendments to the Enforcement Decree and Enforcement Rules of the Comprehensive Real Estate Tax Act

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[Asia Economy Sejong=Reporter Kwon Haeyoung] People who own two or more houses due to unavoidable reasons such as moving or inheritance will now be able to maintain their status as a single household with one house. Owning one additional low-priced local house with a publicly announced price of 300 million KRW or less will not be counted as an additional house when calculating the comprehensive real estate holding tax (종부세).

The Ministry of Economy and Finance announced on the 16th a legislative notice of the amendment to the Enforcement Decree·and Enforcement Rules of the Comprehensive Real Estate Holding Tax Act to ease the tax burden on temporary two-house owners.

According to the amendment, if a new house is acquired for moving but the existing house cannot be disposed of immediately, or if a house is acquired through inheritance and the person holds one existing house along with a low-priced local house, they will pay the comprehensive real estate holding tax as a single household with one house.

First, if a new house is purchased for moving, the person will be recognized as a single household with one house if the existing house is transferred within two years.

Inherited houses will be excluded from the house count for five years after inheritance for taxation purposes. For low-priced houses without speculative intent (publicly announced price of 600 million KRW or less in the metropolitan area and 300 million KRW or less outside the metropolitan area), the status of a single household with one house can be maintained without any time limit. The special exclusion from house count also applies indefinitely if the inherited house share is 40% or less. Additionally, there is no limit on the number of inherited houses, so even if multiple houses are inherited, the person can pay taxes as a single household with one house.

Low-priced local houses located outside the metropolitan area or special autonomous cities and metropolitan cities are also excluded from the house count when calculating the comprehensive real estate holding tax. The standard for low-priced local houses has been set at a publicly announced price of 300 million KRW or less, and only one such house can be additionally held due to concerns about speculation.

This amendment will go through a legislative notice period until the 19th, be promulgated on the 23rd, and take effect thereafter.

Furthermore, single households with one house who are aged 60 or older or have owned the house for more than five years can defer payment of the comprehensive real estate holding tax until the house is disposed of. They must submit a tax payment deferral application to the head of the relevant tax office.