Number of Financial Investment Income Taxpayers Expected to Increase Tenfold
Comprehensive Real Estate Holding Tax Recipients to Surpass 1 Million for the First Time
Tax Burden on Residential Properties and Financial Investments Set to Rise Sharply
[Asia Economy, reporter Lim Chunhan] The number of people subject to the comprehensive real estate holding tax on residential properties is expected to exceed 1.2 million this year, surpassing 1 million for the first time ever. The number of people subject to the Financial Investment Income Tax (FITT) is also projected to increase tenfold.
According to the Ministry of Economy and Finance on November 7, the government announced at the "2022 Tax Reform Plan" forum hosted by the National Assembly Budget Office that the estimated number of people who will receive notices for the comprehensive real estate holding tax on residential properties this year is about 1.2 million. This is 3.6 times the number of taxpayers in 2017 (332,000 people). The number of people subject to the comprehensive real estate holding tax on residential properties has increased from 332,000 in 2017, to 393,000 in 2018, 517,000 in 2019, and 665,000 in 2020, reaching 931,000 last year.
This year's notices for the comprehensive real estate holding tax will begin to be sent out around November 22. The Ministry of the Interior and Safety provides a preliminary estimate, which the National Tax Service then verifies for errors before issuing the official notices. While there may be a margin of error of around 10,000 people compared to the estimate, the number is still certain to surpass 1 million. The amount of comprehensive real estate holding tax on residential properties paid by taxpayers is expected to increase from 400 billion won in 2017 to over 4 trillion won this year.
The Ministry of Economy and Finance expects that, with the introduction of the Financial Investment Income Tax, the number of taxpayers will increase from the current 15,000 to 150,000. Currently, only major shareholders who hold a certain amount or percentage of listed stocks are subject to the capital gains tax on stock transfers. However, with the introduction of the Financial Investment Income Tax, any investor who earns more than 50 million won in stock investment income (for domestic listed stocks; 2.5 million won for other financial products) will be required to pay the tax. In this case, the annual tax burden is also expected to increase by around 1.3 to 1.5 trillion won. While the government has set a policy to postpone the introduction of the Financial Investment Income Tax by two years, from the originally scheduled 2023 to 2025, the opposition party insists that taxation should begin as planned next year.
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