[EDITORIALS]Revise the property tax system

Home > Opinion > Editorials

print dictionary print

[EDITORIALS]Revise the property tax system

The standard land price for tax assessment has risen sharply. It has risen by more than 26.25 percent compared to last year, a record increase and bigger than the previous record of 19.56 percent in 2004. Major reasons are that land prices have risen by an average of 6 percent and the new standard land price reflects 91 percent of the market price, an increase from 76 percent.
It is desirable that the standard land price, which is the basis for tax assessment, should reflect market trends. While it has the effect of preventing real estate speculation, it also makes real estate transactions transparent and corrects regional imbalance.
The problem is that the rise in the standard land price is too rapid. Starting next year, real estate owners and buyers must report their actual transaction prices. This means that tax assessments will now correspond exactly to the actual prices and real estate-related taxes will have to go up. Not only taxes on real estate possession, such as composite real estate tax and property tax, but also on transactions, such as transfer income tax, acquisition tax and registration tax, will rise by a big margin.
We support the government’s policy to revise the real estate tax system to raise the property tax and lower the transaction tax. However, while the property tax has risen abruptly with the rise in standard land prices, the reduction in the turnover tax is too small. The acquisition tax has remained the same while the registration tax rates have been lowered slightly. Under these circumstances real estate owners might find it hard either to keep or to sell their properties.
This would bring a slump in real estate transactions. If people are driven by high property taxes to sell their real estate but can’t do so because of the high turnover tax, then the victims of this system will be innocent real estate owners. The rise of standard land prices under the current tax system would only be a punishment for owning real estate. Property is still a valuable asset to both individuals and businesses, and a central part of our economic activity. The current system, instead of suppressing real estate speculation, could end up causing more harm than good.
The government and the National Assembly should revise the tax system promptly to lessen the burden of the turnover tax. They should also review the possibility of lowering the transfer income tax.
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
s
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now