Comprehensive Real Estate Tax Starts at Market Value of 2 Billion Won… Heavier Burden for Non-Residents

[Anchor]

The government has unveiled a reform proposal for real estate taxation. The overall framework of taxation has shifted from ownership to actual residence, and from the number of homes to the total value. The tax burden for ultra-high-priced homes is also expected to increase compared to before.

First, reporter Jeong Seong-jin has the details.

[Reporter]

The government cited fair taxation as the direction for this real estate tax reform.

The focus is on easing the burden for single-home owners who live in their own houses, while increasing the burden for non-residents who own homes but do not live in them.

[Koo Yun-cheol, Deputy Prime Minister and Minister of Finance and Economy: Under the principle that a house is for "living," not just for "buying," we aim to establish a residence-centered housing market...]

Reflecting recently increased housing prices, the threshold for the comprehensive real estate tax for single-home households will be raised from the existing official public price of 1.2 billion won to 1.4 billion won.

This is equivalent to a market value of about 2 billion won.

However, a clear distinction in the tax burden was established depending on whether the owner actually resides in the property.

While the basic deduction for single-home owner-occupants will increase to 1.4 billion won, the deduction for non-resident single-home owners will actually be lowered from the existing 1.2 billion won to 900 million won.

For a home with an official public price of 1.5 billion won, an owner-occupant's standard amount subject to tax will be 100 million won after subtracting the basic deduction, whereas a non-resident's standard amount will be 600 million won.

The fair market value ratio, which is multiplied by the amount after deductions to apply the tax rate, will be raised from the current 60% to up to 80%.

Addressing criticisms that multi-home owners face reverse discrimination due to the preference for a single "smart home," the comprehensive real estate tax rates will be unified based on housing value rather than the number of homes.

As long as the total official public prices of owned homes are the same, the same tax rate will apply whether a person owns one home or multiple homes.

Accordingly, for tax bases exceeding 1.2 billion won, the tax rates for single- and dual-home owners will be raised to the level of existing multi-home owners by 2028.

The criteria for tax credits previously provided to single-home households will also be changed from the ownership period to the residency period, and a new deduction limit of 6 million won has been established.

The cap on tax increases, which was limited to 1.5 times the previous year's property tax, will also be raised to 2 times.

[Cho Man-hee, Tax Office Chief at the Ministry of Finance and Economy: The comprehensive goal is to enhance tax equity for housing above a certain value and normalize property taxes on non-resident multi-home owners to curb investment and speculative demand...]

According to the reform proposal, the comprehensive real estate tax will apply to approximately 363,000 housing units, representing the top 2.3% nationwide, with next year's tax revenue effect estimated at 800 billion won.

(Reported by Lee Jae-young | Video by So Ji-hye | Graphics by Lee Ga-jin)
※ Please note: This article was translated by AI and may contain errors.