No Comprehensive Real Estate Tax for Couples Jointly Owning Apartments Under 1.8 Billion Won

Basic Deduction Amount for Individuals Raised from 600 Million to 900 Million KRW
Existing Couples with Joint Ownership Special Cases Must Apply for Cancellation to Lose Special Treatment

From this year, couples who jointly own a single house with a publicly announced land price of 1.8 billion KRW will no longer have to pay comprehensive real estate tax. This is due to the increase in the individual basic deduction amount for the comprehensive real estate tax to 900 million KRW.

On the 11th, the National Tax Service announced that it will accept applications for the special taxation and exclusion from aggregation for couples jointly owning one house from the 16th of this month until July 4th.

Couples jointly owning a house, as well as temporary two-house owners, inherited houses, and low-priced houses in provincial areas, will be subject to the one-household one-house calculation method upon applying for the special case. When the special case is applied, the basic deduction amount is raised from 1.1 billion KRW to 1.2 billion KRW. A tax credit of up to 80% is applied depending on age and holding period.

However, since the individual basic deduction amount for the comprehensive real estate tax has also been raised from 600 million KRW to 900 million KRW, it is more advantageous not to apply the special case when a house with a publicly announced price of 1.8 billion KRW is jointly owned 50% each by a couple. Applicants who have already applied will have the special case automatically applied this year as well, so if the special case is disadvantageous, they must apply for cancellation to reduce their tax burden.

For example, if a couple jointly owns an 1.8 billion KRW apartment with a 50:50 share, the comprehensive real estate tax will be '0 KRW.' However, if the special case is applied, the tax will be imposed on 600 million KRW after deducting the basic deduction amount (1.2 billion KRW).

Also, in the case of a 67-year-old man who has jointly owned a house with a publicly announced price of 2 billion KRW for 13 years with a 50% share each with his spouse, the tax amount payable (including the special rural tax) when applying the one-household one-house special case is 682,560 KRW. On the other hand, if the couple pays separately, they only need to pay a total of 391,000 KRW, with 195,500 KRW each.

The National Tax Service plans to send notification letters to about 70,000 people expected to apply for exclusion from aggregation and special taxation this year. This includes 39,000 for exclusion from aggregation, 17,000 for special cases such as temporary two-house ownership, and 16,000 for couples jointly owning a house. The National Tax Service will also send separate notification letters to taxpayers for whom the special case application is disadvantageous this year, advising them to cancel their existing special case applications to avoid disadvantages. Additionally, to facilitate filing, a self-diagnosis service including eligibility for exclusion from aggregation and simulated tax calculation based on special taxation application will be provided on Hometax.

An official from the National Tax Service said, "This year, due to the increase in the basic deduction amount, applying the one-household one-household special case through couples jointly owning a house may actually be disadvantageous. Also, if the one-household one-household calculation method is applied through the temporary two-house special case, failure to transfer the previous house within three years from the acquisition date of the new house may result in bearing the reduced tax amount and interest equivalent surcharge, so please apply carefully."