More people subject to comprehensive real estate tax

Nov 23, 2021, 08:02 am

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Source: Yonhap News

AsiaToday reporter Lee Ji-hoon

The number of people subject to the country’s state-assessed price value for homes has sharply increased to nearly 950,000 this year compared to the previous year. The amount of tax to be paid tripled to 5.7 trillion won (US$4.8 billion). This is mainly due to skyrocketing home prices and hikes in the tax rates. 

A total of 947,000 people is subject to the comprehensive real estate taxes, compared with the 667,000 people tallied for last year, the Ministry of Economy and Finance said Monday. Such people are forecast to pay a combined 5.7 trillion won in taxes, more than tripling from 1.8 trillion won for last year. The government said its actual tax revenue from such taxes is forecast to reach 5.1 trillion won.

Initially, the government expected that the number of taxpayers would rise by 100,000 to 765,000, however the actual number far exceeded the estimate. The amount of tax notified also jumped 3.2 times from last year’s 1.8 trillion won due to the impact of rising home prices. 

The tax burden increased significantly particularly on multiple-home owners and corporations. Among the taxpayers, 485,000 people or 51.2 percent were multi-homeowners, an increase of 130,000 from last year. The tax they have to pay is 2.8 trillion won, or 47.4 percent of the total tax amount, an increase of 1.8 trillion won during the same period. It was found that corporations account for 6.5 percent, and they should pay 40.4 percent of the total tax amount. About 89 percent of the sum will be paid by multi-homeowners and corporations.

“Most of the comprehensive real estate tax burden will be levied on multi-homeowners and corporations,” Finance Minister Hong Nam-ki wrote on his Facebook. “The government has strengthened the taxation of multi-homeowners to suppress speculation in order to stabilize housing market and to enhance the taxation equity of owned assets.”

Among the taxpayers, 132,000 people or 13.9 percent were single home owners, an increase of 12,000 from last year. The tax they have to pay is 200 billion won, up 80 billion won from the previous year. However, the number of single home owners slapped with the tax did not grow significantly as the government raised the taxation base for single home owners to 1.1 billion won from the previous 900 million won. 

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