LH Reinvests 13.6 Billion KRW from Comprehensive Real Estate Tax Reductions into Housing Welfare for Low-Income Citizens

[Asia Economy Reporter Cha Wanyong] Korea Land and Housing Corporation (LH) announced on the 2nd that it will reinvest the reduced comprehensive real estate tax amount, following the government's supplementary real estate tax measures, into welfare projects for low-income housing.

Earlier, on January 26, the government lowered the progressive tax rate on the comprehensive real estate tax for public housing operators owning three or more houses from a maximum of 5% to 2.7%. Additionally, it announced that unsold public rental housing units transitioning to sale would be excluded from the comprehensive real estate tax aggregation for two years, and the valuation requirements for excluding purchased rental housing from the tax aggregation would also be relaxed.

According to the government announcement, LH estimated an annual tax saving effect of 13.6 billion KRW on the comprehensive real estate tax. LH plans to use the saved tax amount to freeze rental fees for rental housing and reduce rental fees for rental commercial properties.

Since March 2020, to overcome crises such as COVID-19 and economic recession, LH has supported approximately 95.4 billion KRW through rent payment deferrals, rent reductions, and freezing rental conditions for rental housing and rental commercial properties.

This year, LH will freeze rental conditions for rental housing for one year and extend the 25% rent reduction period for rental commercial properties by six months.

As a result, the total support scale to alleviate the housing cost burden for low-income households is expected to reach 216.2 billion KRW by the end of next year. LH plans to use the savings from the comprehensive real estate tax reduction as funding for this project.

Lee Han-jun, President of LH, said, “We will faithfully carry out the government's intent to ease the comprehensive real estate tax for public housing operators and continue to expand support for housing-vulnerable groups, striving to enhance housing welfare services that the public can feel.”