Yoon Administration's Comprehensive Real Estate Tax Cut Effects Focused on Multi-Homeowners with 3 or More Houses and Corporations

Analysis Data from Ahn Do-geol, Democratic Party Office
Comprehensive Real Estate Tax Decreased by 3.4598 Trillion Won in Two Years

It has been analyzed that 86% of the comprehensive real estate tax reduction benefits promoted under the current administration were concentrated on multi-homeowners with three or more houses and corporations.

According to the data on the "Status of Comprehensive Real Estate Tax Rates on Housing" submitted by the National Tax Service to Ando-geol, a member of the Democratic Party of Korea, the housing portion of the comprehensive real estate tax decreased from 4.4085 trillion won in 2021 to 948.7 billion won last year. Representative Ando stated, "Considering that there was little change in the publicly announced prices over the two years, the 3.4598 trillion won decrease is due to the tax reduction measures."

When comparing last year's comprehensive real estate tax with that of 2021 by type, single-homeowners with one house saw a reduction of 142.9 billion won, and individuals who either own one house each as a couple or own two houses and are subject to the general tax rate saw a reduction of 271.9 billion won. On the other hand, individuals owning three or more houses enjoyed a tax reduction effect of 2.327 trillion won, and corporations benefited from a tax reduction of 655 billion won.

Apartment complexes in Gangnam-gu and Songpa-gu, Seoul. [Image source=Yonhap News]

The comprehensive real estate tax calculates the taxable standard by subtracting the basic deduction amount from the publicly announced price of houses owned by individuals and multiplying by the fair market value ratio. While 95% was applied in 2021, it was lowered to the legal minimum of 60% last year. Additionally, as a result of the 2022 tax reform, the deduction amount was increased and the tax rate was lowered, reducing the tax burden. Representative Ando's office explained, "If the taxable standard decreases, a lower tax rate is applied, so the larger the total publicly announced price of houses owned by an individual, the more the tax burden decreases."

Looking at the tax reduction effect per person, single-homeowners saw a reduction of 710,000 won, those owning one to two houses saw a reduction of 350,000 won, whereas multi-homeowners with three or more houses had their tax burden reduced by 3.45 million won. In the case of corporations, those owning two or fewer houses had their taxes reduced by 2.46 million won, while corporations owning three or more houses received a tax reduction benefit of 30.01 million won.

Representative Ando emphasized, "The abolition of the comprehensive real estate tax surtax rate should be approached cautiously in terms of tax revenue loss, tax fairness, and real estate market stability."