SEOUL– South Korea said Wednesday it will temporarily ease property taxes on owners of a single home amid public discontent about the government’s housing policy and sharply increased home prices.
This year, the government will have owners of a single home pay similar amounts of property-holding taxes to those of last year, the Ministry of Economy and Finance said in a statement.
To make that happen, the government will calculate property and comprehensive real estate taxes for this year based on the declared value of their single homes last year, it said.
The country’s declared value of homes averaged 192 million won (US$158,000), with Seoul leading with an average of 443 million won, followed by the Gyeonggi Province with 281 million won, Daegu with 191 million won and Busan with 166 million won.
Owners of multiple homes also will be subject to the same property taxes this year as they were last year if they sell most of their homes by May and own only one home, the finance ministry said.
The government will also allow single-home owners aged 60 and older to postpone the payment of comprehensive real estate taxes, the statement said.
Last year, homes whose declared value exceeded 1.2 billion won were subject to comprehensive real estate taxes.
In 2022, owners of a single home with a declared value of 1.21 billion won or more in 2021 will pay the same amount of comprehensive real estate taxes as last year even if the home’s declared value rises to 1.3 billion won or more this year, an official at the transport ministry said.
In recent months, the country’s real estate market appears to be stabilizing due mainly to increased home supply plans and rising interest rates.
But public complaints about the Moon Jae-in administration’s real estate policy mounted in the past several years as skyrocketing home prices drove up tax burdens on homeowners and raised costs for people who seek to rent or buy homes.
The government has unveiled a set of measures to cool the red-hot real estate market, including tax hikes and tighter lending rules. But such steps largely have lead to a short-term letup in price gains as excessive demand for homebuying has not easily subsided.
The latest measures come as the country’s state-assessed price value for homes has sharply increased in tandem with high-flying home prices.
In South Korea, the government taxes land and homes based on its annual assessment value instead of the actual market value.
The average government-assessed housing prices rose 19.05 percent across the nation last year, the sharpest on-year gain in 14 years, as the government seeks to continue to hike them in a bid to match them close to their market value.
The government said last year it plans to raise state-evaluated prices for all types of real estate, including apartments and land, to up to 90 percent of their market prices in the next 10-15 years.
In 2021, the central and provincial governments collected 10.9 trillion won (US$8.98 billion) in property-related taxes, more than doubling from 3.93 trillion won in 2016, a year before President Moon took office in May 2017, according to a lawmaker from the main opposition party.
During the election campaign, President-elect Yoon Suk-yeol promised to ease the comprehensive real estate tax for owners of one home and overhaul other property-related taxes.
He also pledged to supply 2.5 million new homes during his term and ease rules on reconstruction and redevelopment.
Source: Yonhap News Agency