New taxes have tenants outraged

Social Affairs

New taxes have tenants outraged

Published: 24 Feb. 2015, 21:09

Those living in large apartment complexes nationwide will see a significant increase in their maintenance fees this year due to changes in the tax code by the central government that went into effect in 2015.

Since January, residents in apartments larger than 135 square meters (1,453 square feet) have been required to pay 10 percent of the complex’s total maintenance costs for services rendered by outside companies.

Apartment complexes with 300 units or more must also carry out an annual audit via an outside accounting firm by October.

Yet, as fees rise, so too will wages for security workers at those complexes. In Seoul, about 117,700 apartments - or 7.9 percent - of the total 1,481,200 are larger than 135 square meters.

And 1,349 - or 32 percent - of 4,181 complexes had 300 apartments or more as of 2013, according to the Seoul Metropolitan Government.

But it is people living on the outskirts of the capital, where apartments are bigger and cheaper, who are expected to be more affected by the new regulation.

A 54-year-old man surnamed Kim who resides in Goyang, Gyeonggi, was surprised when he saw his recent monthly maintenance bill, which stated that he had to pay an extra 16,754 won ($15) for his apartment, which is larger than 135 square meters.

The statement covered not only the maintenance costs for his apartment, but also payments made to the security and the cleanup crew.

Smaller units in Kim’s complex must now pay an additional 5,066 won, which goes toward security workers, while those who live in larger residences must pay 8,066 won increases

“Those who have expensive apartments that are worth 2 to 3 billion won are not paying the additional tax because those apartments are smaller than 135 square meters,” Kim said. “It’s unfair that we pay an additional tax of 200,000 won per year when our apartment costs are only 500 million won.”

The situation appears similar at other apartment complexes.

At Daerim Apartments in Yongin, Gyeonggi, all apartments must pay an additional tax since all 365 units are larger than 135 square meters. The apartment complex saw a 3,593,144 won increase in total maintenance costs, or 10,850 won per unit.

And the increase is only expected to grow with the complex’s security workers set to receive a 2 to 3 percent raise in their salaries in March.

“Apartments’ administrative offices are already paying an additional 10 percent in taxes for contracting with these security or cleanup companies,” said Hwang Jae-wuk, the president of the Association of Apartment Resident Representatives’ chapter in Yongin. “It’s imposing double taxes.”

In fact, those living on Seoul’s outskirts have grown so outraged that they said they are planning to take collective action.

Chae Su-cheon, the president of Gyeonggi Apartment Association, agreed: “It’s inappropriate to collect additional taxes from large apartments when the economy has slowed down and security workers are getting raises in their salaries.”

BY JEON ICK-JIN [bongmoon@joongang.co.kr]