SH Corporation "Public Rental Housing Should Be Exempt from Property Tax"... Requests Government

"Unnecessary for Public Rental Housing Supply"
Criticism of Unreasonable Property Tax Reduction Regulations

Seoul Housing and Communities Corporation (SH Corporation) has requested the central government to exempt property taxes on public rental housing.

On the 4th, SH Corporation announced that it had requested the Office for Government Policy Coordination, Ministry of Economy and Finance, Ministry of the Interior and Safety, and Ministry of Land, Infrastructure and Transport to exempt property taxes on public rental housing. SH Corporation explained, “The imposition of property taxes (property tax + comprehensive real estate tax) on public rental housing, which restricts property rights (rental income), is acting as a factor that diminishes the social contribution of public rental housing.”

According to SH Corporation, other countries implement property tax exemptions to reduce the operational burden of public rental housing. In the past, local public corporations such as SH Corporation were also exempt from property tax, but due to the 2012 tax law revision, they are currently bearing property taxes. The comprehensive real estate tax burden on approximately 138,000 public rental housing units held by SH Corporation increased 13.7 times from 2.8 billion KRW in 2012 to a peak payment of 38.5 billion KRW in 2021.

The corporation also raised issues regarding the unreasonable property tax reduction regulations between public rental and private rental housing, and between Korea Land and Housing Corporation (LH) and local public enterprises. In the case of multi-family housing, only private rental housing receives property tax reductions, and private rental housing in the 40?85㎡ range receives 25% more property tax reductions compared to public rental housing. SH Corporation pointed out, “Despite public rental housing offering affordable rents and long-term leases, greater tax benefits are given to the private sector.”

Additionally, it was added that for the same purchased rental housing, LH receives property tax reductions even for detached houses, and in areas over 60㎡, LH receives 25% more property tax reductions compared to local public enterprises like SH Corporation.

Kim Heon-dong, President of SH Corporation, stated, “Imposing property tax and the speculative suppression tax, comprehensive real estate tax, on public housing is an unnecessary regulation on the supply of public housing,” and added, “We propose exemption from property taxes on public rental housing to expand public housing supply and are currently pursuing a constitutional court review (constitutional complaint) regarding the comprehensive real estate tax being levied.”