The South Korean government is making changes to the real estate tax affecting homeowners and prospect homeowners. Many factors, including increases in the comprehensive real estate tax rate and the assessed value of houses, affect the real estate tax. Experts say the most fundamental way to reduce tax payments is to go over the new real estate tax system.
A representative change in the taxation system is made in the comprehensive real estate tax. The fair market rate, which is used when calculating the comprehensive real estate tax, will be increased from 80 percent to 85 percent. When calculating the comprehensive real estate tax, the tax base is determined by multiplying the assessed value and 80 percent of the fair market value. From now on, 85 percent of the fair market value will be applied. If the price of a house stays the same, the amount of tax to be paid will be increased. The government plans to increase the rate by 5 percentage points every year to make it 100 percent by 2022.
The tax rate itself has been increased as well. The government raised the rate on comprehensive real estate tax imposed on owners of three or more houses or owners of two or more houses in areas, where there is high demand, to 0.6-3.2 percent, a 0.1-1.2 percentage point increase from a year ago.
“An increase in assessed value of houses will not only affect the property tax of this year but of next year and beyond,” said Choi Yong-jun, a tax accountant at tax consulting firm Dasol. The assessed value of 220,000 houses nationwide will be released on next Friday and that of apartments will be announced in April.
Jae-Myung Park firstname.lastname@example.org