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

[Anchor]

The government has unveiled its real estate tax reform plan. The core framework of taxation has shifted from ownership to residence, and from the number of homes to total property value. The tax burden for ultra-luxury homes is also expected to increase compared to before.

First, reporter Jeong Seong-jin brings us the details.

[Reporter]

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

The focus is on easing the burden for single-home owners who live in their own homes 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 home is for "living" rather than "buying," we aim to establish a residence-centered housing market...]

Reflecting recently rising housing prices, the threshold for the Comprehensive Real Estate Tax for single-home households will be raised from the existing official appraised value 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 difference in tax burden has been established depending on whether the owner resides in the property.

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

For a home with an official appraised value of 1.5 billion won, an actual resident will have a standard amount of 100 million won after subtracting the basic deduction, whereas a non-resident will have a standard amount of 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 a maximum of 80%.

In response to criticisms that multi-home owners face reverse discrimination due to the preference for so-called "one prized asset," 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 appraised value of owned homes is 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 two-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 residence period, and a 600 million won deduction limit has been established.

The limit on the increase in tax burden, which was restricted to 1.5 times the property tax of the previous year, will also be raised to 2 times.

[Cho Man-hee, Tax Official at the Ministry of Finance and Economy: For homes above a certain value, we aim to enhance tax equity, and for non-resident multi-home owners, normalize property taxes to curb investment and speculative demand, comprehensive goals like these...]

The target for the Comprehensive Real Estate Tax under the reform plan is estimated at about 363,000 housing units, representing the top 2.3% nationwide, with next year's tax revenue effect projected at 800 billion won.

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