"Tax Revision to Surge Korail's Comprehensive Real Estate Holding Tax by W41.0 Bln, LH's by W12.9 Bln"

Projections show that if the tax revision finalized by the government at a cabinet meeting last month is implemented, the comprehensive real estate holding tax burden on major public institutions responsible for housing, railways, roads, and airports will surge.

Representative Kim Jung-jai of the ruling People Power Party, a member of the National Assembly's Land, Infrastructure and Transport Committee, announced today (October 6) that she analyzed the tax revision's impact on the comprehensive real estate holding tax for public institutions under the Ministry of Land, Infrastructure and Transport—including the Korea Land and Housing Corporation (LH), Korea Railroad Corporation (Korail), Korea Expressway Corporation, and Incheon International Airport Corporation—as well as metropolitan local public enterprises such as Seoul Housing & Communities Corporation (SH), and obtained these findings.

To eliminate forecasting discrepancies across institutions, the analysis was based on data recalculated by the institutions themselves. It maintained the asset holdings, officially assessed prices, officially assessed land values, and taxation classifications from the 2025 comprehensive real estate holding tax reporting and payment period constant through 2028, excluding factors such as rises in officially assessed prices or the acquisition and disposal of new assets, while reflecting solely institutional changes resulting from the tax revision.

Previously, the government finalized 11 tax law amendment bills as government proposals on the 1st of last month. These included a plan to raise the fair market value ratio for residential comprehensive real estate holding tax from the current 60% up to a maximum of 80% by 2028 depending on the target—while maintaining the current 150% cap on the upper limit of the tax burden increase—along with revisions to the tax rate system and increases in the comprehensive taxable land tax rates.

The institution expected to experience the largest increase in the comprehensive real estate holding tax is the Korea Railroad Corporation. Its tax burden, including the rural special tax, was 112.8 billion won in 2025, but is estimated to rise by 36.3% (41.0 billion won) to 153.8 billion won by 2028.

Among the increase, 40.6 billion won was analyzed to stem from changes to the comprehensive taxable land tax rates, and 400 million won from changes to the fair market value ratio for residential properties.

During the same period, the comprehensive real estate holding tax for Incheon International Airport Corporation is projected to increase by about 13.7 billion won from 47.48 billion won to 61.18 billion won, while that for the Korea Expressway Corporation is projected to rise by 12.95 billion won from 44.13 billion won to 57.08 billion won.

LH is expected to see an increase of 12.86 billion won, rising from 34.9 billion won in 2025 to 47.76 billion won in 2028.

The tax burden for 2028 consists of 460 million won from the higher fair market value ratio for residential properties, 2.7 billion won from residential tax rate changes, and 9.7 billion won from comprehensive taxable land tax rate changes.

The tax burdens are estimated to increase by 7.01 billion won for SH Corporation—from 16.58 billion won in 2025 to 23.59 billion won in 2028—and by 4.31 billion won for Gyeonggi Housing & Urban Corporation (GH), from 8.07 billion won to 12.38 billion won.

Representative Kim Jung-jai stated, "The increased tax burden on public institutions leads to a contraction in investment capacity and heavier project cost burdens, raising concerns that it could be passed on as a deterioration in the quality of public services—such as public housing supply, railways, roads, and airports—and higher costs." She added, "The government must carefully examine not only how the tax revision simply increases the book value of public institutions' tax burdens, but also what kind of impact it will have on the daily lives of the public."

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