Non-Resident Single-Home Owners to Keep 1.2 Billion Won Threshold After U-Turn on Tax Changes

[Anchor]

The government has finalized its tax reform plan, dropping most of the additional property tax burdens it previously planned to impose on non-resident single-home owners. The move appears to be a step back in the face of strong public backlash.

Our first report this Tuesday is by reporter Lee Seong-hoon.

[Reporter]

The government has decided to maintain the comprehensive real estate holding tax basic deduction at the current 1.2 billion won for non-resident single-home owners.

This comes 29 days after it announced a plan on August 3 to lower the threshold to 900 million won.

[Kang Yu-jung / Senior Presidential Spokesperson: To narrow the gap in tax burdens between resident and non-resident single-home owners, the basic deduction for resident single-home owners will be raised from 1.2 billion won to 1.4 billion won, while the basic deduction for non-resident single-home owners will be maintained at the current 1.2 billion won.]

A plan to raise the cap on increases in the comprehensive real estate holding tax burden from 150 percent of the previous year's property tax to 200 percent has also been scrapped, keeping it at the current 150 percent.

For non-resident single-home owners with joint ownership between spouses, the deduction—which had been reduced to 400 million won per person—was raised to 600 million won, making the total joint deduction 12 billion won (Note: 1.2 billion won combined).

However, this remains lower than the current combined spousal deduction of 1.8 billion won.

Consequently, property tax burdens for next year will decrease compared to the initial reform proposal.

Assuming an apartment in Seocho-gu, Seoul, with an officially assessed price of 3.5 billion won is held as a non-resident single home, the property tax for a sole owner would be 26.41 million won, a 6.77 million-won reduction from the original plan.

For joint ownership by a couple, the tax is calculated to drop by about 5 million won, from 21.84 million won to 16.84 million won.

[Woo Byung-tak / Expert Advisor at Shinhan Premier Pathfinder: Basically, considering that the originally exempted amount for a single homeowner under sole ownership was 1.2 billion won, it has returned to that same level, meaning that a significant portion of the disadvantages for non-residents has been alleviated.]

With the gap in deductions between residents and non-residents narrowing significantly compared to the initial proposal, the principle of an actual-residence-centered reform that the government has emphasized has been largely shaken.

The government explained that it revised the final plan by reflecting opinions raised during the legislative notice and inter-ministerial consultation processes.

The final plan will be submitted to the National Assembly by tomorrow and will then undergo review during the regular parliamentary session.

(Photo: Yonhap News - Wait, let me follow the exact text: Video by Jeong Sang-bo and Yoon Hyeong | Video editing by Kim Ho-jin)
※ Please note: This article was translated by AI and may contain errors.