A research study has been released showing that South Korea operates a strong progressive tax structure where property taxes surge sharply compared to other countries as a person owns multiple high-priced homes.
According to the results of a research commissioned by the Seoul Metropolitan Government, which compared the taxes that must be paid when owning a home of the same value across six cities including Seoul, New York, Los Angeles (LA), Tokyo, London, and Singapore, South Korea's progressive structure was relatively strong.
The study found that if someone owns and directly resides in a single home priced at 1.05 billion won, which is the median price for apartments in Seoul, the annual property tax is calculated at 1.07 million won.
This is because the officially assessed price falls short of 1.2 billion won, the basic comprehensive real estate holding tax exemption for single-home owners, resulting in only property tax being levied without the comprehensive real estate holding tax.
The lowest was Singapore, which applies low tax rates to owner-occupied homes, at a mere 580,000 won.
Seoul followed, while LA was the highest at 8.07 million won, approximately 7.5 times the level in Seoul.
The property tax burden relative to income showed a similar pattern.
In Seoul, if a person earning the median income of 65 million won resides in a home of the median price, the property tax burden is 1.6% of their income. In New York, however, if a person earning a median income of $149,000—about 210 million won in Korean currency—resides in a home of the median price, they pay 7.4% of their income in property taxes, the study showed.
On the other hand, the situation was different when a person owned multiple homes.
If someone owns three homes priced at 2.3 billion won each, which fall into the top 10% of apartment prices in Seoul, the annual property tax is calculated at 48.54 million won.
Among the six cities compared under the same conditions, this was the second highest following LA's 53.81 million won.
New York was lower than South Korea at 39.59 million won, and Singapore was 23.56 million won, failing to reach even half of Seoul's level.
The research team analyzed that in the case of Seoul, the comprehensive real estate holding tax is levied by aggregating the officially assessed prices of owned homes, and a progressive taxation structure where tax rates increase as the tax base rises has amplified the tax burden for owners of multiple expensive homes.
(Reported by Kim Jiuk | Video by E:U | Graphics by Yook Do-hyun | Produced by SBS Digital News)
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