"Comprehensive Real Estate Holding Tax for Non-Resident Single-Home Owner with KRW 3 Bln Publicly Assessed Value to Be KRW 12.04 Mlnd Next Year"... Up KRW 4.29 Mln

The government projected yesterday (the 13th) that the comprehensive real estate holding tax for a non-resident single-household, single-home owner of an apartment valued at around KRW 4.3 billion will increase by just over KRW 4 million next year compared to this year.

The Ministry of Economy and Finance made this estimate in data submitted to the National Assembly for the confirmation hearing of Lee Hyung-il, nominee for Deputy Prime Minister and Minister of Economy and Finance, to be held on the 15th.

According to the Ministry of Economy and Finance, under the current system, the calculated comprehensive real estate holding tax for a non-resident single-home owner with a publicly assessed value of KRW 3 billion (market value of approximately KRW 4.3 billion) stands at around KRW 7,747,000. However, if the tax reform bill submitted by the government to the National Assembly is finalized and implemented as is, it will reach KRW 12,038,000 next year.

This represents an increase of KRW 4,291,000 from this year.

Based on the original tax reform bill announced on the 3rd of last month, the calculated tax amount for next year was KRW 15,365,000. However, the calculated amount changed as the revision adjusted the plan to maintain the basic deduction for non-resident single-home owners at KRW 1.2 billion, the same as the current system, instead of lowering it to KRW 900 million.

Compared to the original bill, this is KRW 3,327,000 lower.

For a publicly assessed value of KRW 1.5 billion (market value of approximately KRW 2.2 billion), the tax is currently KRW 691,000 and will rise to KRW 806,000 next year. For a publicly assessed value of KRW 2 billion (market value of approximately KRW 2.9 billion), it will increase from the current KRW 2,275,000 to KRW 2,774,000 next year.

These estimates are based on owners under the age of 60 and before applying tax credits and the ceiling on tax burden increases (150%), and actual tax burdens may vary depending on housing prices, age, and periods of ownership and residency.

According to the confirmation hearing request submitted to the National Assembly earlier, nominee Lee purchased an apartment in Gwacheon, Gyeonggi Province, in February 2009 and has held it for 17 years, but his actual residency period amounted to a total of only 4 months based on transfer registrations.

This apartment has currently been demolished due to reconstruction.

Regarding this, the Ministry of Economy and Finance explained, "The nominee's family has moved since 2009 due to reasons such as the relocation of the Ministry of Economy and Finance (formerly the Ministry of Finance and Economy) to Sejong City."

In response to the question of whether the principle of penalizing non-resident homeowners in terms of tax could be equally applied to the nominee's own reconstructed apartment in Gwacheon, the ministry replied, "According to the government bill submitted to the National Assembly, it is considered difficult to recognize the non-residency period as a residency period."

However, regarding the question of whether holding a reconstructed house without long-term actual residency can be viewed as speculative demand, the ministry drew a line, stating, "There are aspects where it is difficult to conclude it as speculative demand based solely on the fact that they did not reside there."

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.