National Tax Service Launches Series on 'Real Estate Tax Mistakes' Focusing on Comprehensive Real Estate Holding Tax
The National Tax Service (NTS) announced on the 21st the 'Comprehensive Real Estate Tax' casebook, part of the 'Real Estate Tax Mistake Cases' series, which contains useful tax knowledge and examples to help resolve questions about real estate-related taxes when holding or transferring real estate.
An NTS official explained, "This edition focuses on the comprehensive real estate tax and is structured around cases related to single-household single-homeowners and exclusion of combined rental housing to assist with the September exclusion and special application process."
According to the announcement, Mr. Jo Yangdo, who owns two houses (House A and House B), signed a sales contract to receive the balance payment for House A on May 30 this year. However, at the buyer's request, the balance payment was delayed and received on June 3, and the ownership was transferred. Mr. Jo expected not to pay the comprehensive real estate tax as a single-household single-homeowner (House B's official price is 1.2 billion KRW), but he was notified of the tax as a two-homeowner.
The comprehensive real estate tax is imposed on those who pay property tax. Property tax is levied on individuals who own taxable assets as of June 1 each year (the tax base date). If a house is sold after June 2, the seller is responsible for that year's property tax and comprehensive real estate tax. Therefore, since Mr. Jo had not received the balance payment for the sold house as of June 1, he was considered the owner of the house and was notified of the comprehensive real estate tax.
An NTS official stated, "Since the tax base date for the comprehensive real estate tax is June 1 every year, when buying or selling real estate, it is important to check whether the balance payment date is before or after June 1," adding, "From the perspective of the comprehensive real estate tax burden, it is advantageous to receive the balance payment before June 1 when selling real estate, and to make the balance payment after June 2 when buying."
There was also a case where a person who already owned one house (House A) acquired a low-priced house in a province but did not receive the single-household single-homeowner special exemption. According to the casebook, Mr. Kim Gukse's spouse acquired a farmhouse (House B) in Wonju-si, Gangwon-do, for 200 million KRW after retirement for rural living. Mr. Kim applied for the single-household single-homeowner exemption but was not granted it. If Mr. Kim owned both House A and House B together, he could be considered a single-household single-homeowner, but since Mr. Kim and his spouse each owned one house, Mr. Kim could not receive the exemption. To qualify for this benefit, only one household member must own a house, and other household members must be non-homeowners.
The comprehensive real estate tax mistake cases newly released by the NTS can also be found on the NTS website and official blog.
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