Let’s take a look at one of the real estate tax related news in South Korea, the ‘Comprehensive Real Estate Tax Reduction’ issue. According to a recent announcement by the Ministry of Land, Infrastructure, and Transport, the number of people who pay the comprehensive real estate tax and the amount of the tax have decreased significantly.
Benefits of reduced marginal taxes
In 2023, the number of people eligible to pay will drop by about a third from last year, from 1.2 million to 410,000. This is the largest decrease since the program’s inception in 2005. Taxes also plummeted from 3.3 trillion won to 1.5 trillion won.
Reasons for tax cuts
These tax cuts are attributed to a number of factors, including lower marginal tax rates due to tax law changes and a decline in the list price of homes across the country.
Differences between multifamily and single-family homes
In the case of single-family homes, the number of taxpayers subject to the ad valorem tax dropped from 235,000 last year to 111,000 this year, and the tax amount plummeted from about 260 billion won to 90 billion won this year.
On the other hand, for multi-family homes, the number of people assessed for the ad valorem tax dropped dramatically from 944,000 last year to 242,000 this year, and the tax amount also plummeted from 2.3 trillion won, making it significantly less than last year.
Conclusion
The ministry said it believes the reduction in the comprehensive real estate tax is a result of normalizing the tax system to reduce tax burden. It’s been a real benefit to homeowners, and we can look forward to continued improvements in the future.
