Ministry of Economy and Finance Announces Legislative Notice on June 6 for Amendment to Comprehensive Real Estate Tax Act Enforcement Decree
Tax Burden Relief for Taxpayers Regardless of Speculative Purpose
The government will expand the comprehensive real estate tax (CRE tax) aggregation exemption for ancillary land of publicly registered rental housing. Previously, the exemption benefit was only granted if the land and building owners were the same. This will be applied starting from the CRE tax liability established for the tax notices and assessments issued in November this year.
On the 6th, the Ministry of Economy and Finance announced that it has publicly notified the draft partial amendment to the Enforcement Decree of the Comprehensive Real Estate Tax Act containing these provisions. The Ministry expects this to reduce rental housing business costs, stabilize housing, and expand the supply base. The amendment will be finalized after the public notice period ends on the 16th of next month and following the Cabinet meeting scheduled for the 29th.
Publicly registered rental housing refers to private rental housing located on ancillary land owned by public rental housing or public housing operators. The government explained that the purpose of this amendment is to alleviate the CRE tax burden on taxpayers unrelated to speculative purposes.
Specifically, aggregation exemption will also be allowed for housing ancillary land within traditional temple preservation areas. This aims to ease the excessive CRE tax burden on traditional temples and the surrounding communities (Sahachon), and to support the preservation of cultural heritage and the succession of traditional culture of these temples.
For unsold public rental housing units held by public housing operators, a temporary aggregation exemption will be allowed for two years from the date of unsold status, supporting the smooth supply of rental housing by public housing operators.
Additionally, when applying for special cases excluding the number of houses and for the application of the basic progressive tax rate, if there is no change in the application details after the initial application, the obligation to reapply from the following year will be exempted, reducing the tax cooperation burden on taxpayers. Temporary two-households, inherited houses, and low-priced houses in local areas will be considered as one household with one house, and corporations without speculative purposes will not be subject to the heavy tax rates (2.7% for two or fewer houses, 5.0% for three or more houses) but will be subject to the basic progressive tax rates (0.5~2.7%).
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