Increase of 100,000 Taxpayers Due to Failure to Introduce Special Deduction for Single-Homeowners
[Asia Economy Sejong=Reporter Kwon Haeyoung] This year, the number of taxpayers subject to comprehensive real estate holding tax (종합부동산세) on housing is estimated to reach about 1.2 million. As the Democratic Party of Korea opposed the introduction of a special deduction for one-household one-home owners, it is estimated that about 100,000 additional taxpayers will be subject to the tax, increasing the tax burden by approximately 60 billion KRW for one-home owners.
The Ministry of Economy and Finance released reference data on the 8th titled '2022 Housing Comprehensive Real Estate Holding Tax Taxpayer Numbers and Tax Burden,' stating that about 8% of housing owners (14.7 million as of 2020) are subject to the tax. This represents a 28.9% increase compared to last year's 931,000 taxpayers. Compared to 332,000 taxpayers in 2017, the first year of the Moon Jae-in administration, the number has increased about 3.5 times.
An official from the Ministry of Economy and Finance explained, "The significant increase in taxpayers subject to the housing comprehensive real estate holding tax this year is due to the sharp rise in official property prices earlier this year," adding, "The official price of apartment complexes rose by 17.2% compared to the previous year, leading to an expected surge in tax burden."
Earlier, the government pursued various measures to ease the tax burden this year, including ▲ lowering the fair market value ratio (from 100% to 60%) ▲ introducing a special deduction of 300 million KRW for one-household one-home owners ▲ establishing special provisions for temporary two-home ownership and other housing counts. Due to the reduction in the fair market value ratio, the housing comprehensive real estate holding tax, initially estimated at about 9 trillion KRW, is expected to remain at a similar level to last year's 4 trillion KRW, and the per capita tax burden is expected to decrease compared to last year. The special provisions for temporary two-home ownership, inherited homes, and low-priced homes in rural areas are also estimated to ease the tax burden for about 37,000 taxpayers.
However, due to the failure of the National Assembly to agree on the special deduction bill for one-household one-home owners, about 100,000 additional taxpayers will be subject to the comprehensive real estate holding tax, increasing the overall tax burden for one-household one-home owners by approximately 60 billion KRW.
The government plans to finalize and announce the tax amount and number of taxpayers for this year's comprehensive real estate holding tax around the 21st.
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