'Jongbuse Bomb' Roared Out... Half Paid Less Than 250,000 Won

Democratic Party Rep. Goh Yong-jin Analyzes National Tax Service Data
Top 1% Comprehensive Real Estate Tax Drops from 1.35M to 1.09M
Bottom 50% Average Amount Around 230,000 Won

Last year, the total comprehensive real estate tax (종부세) on housing for single-homeowners amounted to 256.2 billion KRW, an increase of 22.1 billion KRW compared to the previous year (234.1 billion KRW). The number of taxpayers subject to 종부세 was 235,000, about 80,000 more than in 2021 (153,000).

According to the '2020-2022 Comprehensive Real Estate Tax on Housing for Single-Homeowners Percentile Data' received by Assemblyman Goyongjin of the Democratic Party from the National Tax Service on the 20th, the average 종부세 per single-homeowner was 1.09 million KRW, a decrease of 440,000 KRW (28.8%) compared to 2021 (1.53 million KRW). Although the number of taxpayers increased and the official housing price rose by 17.2%, the government's tax reduction measures, which significantly lowered the fair market value ratio applied when calculating the taxable amount from 95% in 2021 to the legal minimum of 60%, appear to have influenced this decrease.

When arranging all single-homeowner 종부세 taxpayers by taxable amount, the median tax amount per person was 459,000 KRW, down 105,000 KRW from the previous year (564,000 KRW).

Among single-homeowners, the bottom 80% bore an average tax burden of 421,000 KRW. The average for the bottom 80% is similar to the median value of 459,000 KRW for all single-homeowners. Excluding the highest-priced luxury homes, it seems that single-homeowner 종부세 taxpayers generally bear about this amount.

The average tax amounts were ▲ bottom 50% (198,000 KRW) ▲ bottom 20% (68,000 KRW) ▲ bottom 10% (33,000 KRW). Taxpayers with less than 300,000 KRW in tax accounted for 37% (87,000 people), less than 200,000 KRW for 27% (64,000 people), and less than 100,000 KRW for 14% (33,000 people). Forty percent (94,000 people) of single-homeowner 종부세 taxpayers paid less than the average single-home property tax last year (337,068 KRW).

Looking at official prices, the 1.1 to 1.2 billion KRW range accounted for 17% (40,000 people), with an average tax amount of about 78,000 KRW per person. The average tax amount in the 1.4 to 1.5 billion KRW official price range was 475,000 KRW. An official price of 1.5 billion KRW corresponds to a market price exceeding 2 billion KRW. Official prices of 1.5 billion KRW or less represent half of the single-homeowner taxpayers, who pay an average of 245,000 KRW.

The average official price of single-homeowners subject to 종부세 in 2022 was 1.71 billion KRW. After deducting the basic exemption of 1.1 billion KRW, the taxable standard per person was 360 million KRW. Multiplying the taxable standard by the tax rate yields about 3 million KRW. After deducting overlapping amounts with property tax and applying elderly and long-term holding deductions (1.19 million KRW), the final tax amount (1.09 million KRW) is calculated. Even excluding the overlapping property tax portion, nearly half (47.8%) of the tax amount is credited.

Single-Homeowner 종부세 Decreased from 1.35 Million to 1.09 Million KRW

Meanwhile, due to the government's reduction of the fair market value ratio last year, the average 종부세 per single-homeowner was 1.09 million KRW, down 440,000 KRW from the previous year (1.53 million KRW).

By percentile, the average 종부세 per person in the top 0.1% was 46.36 million KRW, a decrease of 17.9 million KRW from the previous year (64.26 million KRW). The top 1% paid an average of 18.79 million KRW, down 7.6 million KRW from the previous year (26.39 million KRW). The top 10% had an average tax burden of 5.75 million KRW, a decrease of 2.72 million KRW compared to 8.47 million KRW the previous year.

In contrast, the average tax burden for the bottom 80% was 421,000 KRW, a decrease of only 114,000 KRW. The average tax amount for the bottom 50% was 198,000 KRW, down 35,000 KRW from the previous year, and the bottom 20% decreased by 3,000 KRW. In a progressive tax system, when the taxable standard decreases, taxpayers may move to lower tax rates, so the tax burden decreases more for high-priced homes. This is because the top 1% owning luxury homes receive greater tax reduction benefits.

These figures are based on the 종부세 amounts as of June last year and do not reflect this year's official price decline (18.6%).

Last year, the 종부세 law was amended to raise the basic exemption for single-homeowners from 1.1 billion KRW to 1.2 billion KRW and reduce tax rates by 16-19%. Applying this year's official price decline rate, the number of single-homeowner 종부세 taxpayers is expected to decrease by about 47% (110,000 people). Experts predict that the average tax burden notified at the end of this year will sharply drop to about half of last year's level.

Assemblyman Goyongjin stated, "Half of the single-homeowner 종부세 taxpayers, the bottom 50%, pay less than 200,000 KRW annually. Since tax credits for actual residence single-homeowners have been continuously expanded, the actual 종부세 taxable amount is not high. This year, with the sharp drop in official prices, the number of taxpayers and tax burden levels will significantly decrease."