National property tax expands its reach

Economy

Published: 08 Nov. 2020, 12:30

National property tax expands its reach

Views of apartments in Seoul on Wednesday. The government and the ruling party on Wednesday announced the assessed values of apartments will be raised to 90 percent of the market value in the course of 10 years. The increase in assessed value is expected to increase the burden on property taxes on real estates including more apartment owners to face the comprehensive real estate tax. [YONHAP]

As early as January, apartment owners will be able to calculate in advance their comprehensive real estate tax liability through the National Tax Service website.

While such services have been offered by private companies previously, this is the first time that such calculation has been possible through the tax agency.

The service will help people make decisions on whether to buy or sell property by informing them of their tax liability.

Next year, the number of people liable to the comprehensive real estate tax is expected to increase as the government raises assessed values of properties.

According to KB Kookmin Bank, the average market value of an apartment in Seoul now exceeds 1 billion won ($892,000).

The comprehensive real estate tax is a national tax targeting expensive residential real estate and some kinds of land. It is separate from property taxes levied by local governments.

The tax is imposed on apartments with assessed values above 900 million won.

Last year, 595,000 property owners were liable to the comprehensive real estate tax, which was a 27.7 percent increase compared to 2018.

That was 3.5 percent of the 14 million people that own property.

The government collected 3.3 trillion won, which was a 58.3 percent increase year-on-year.

The number of people liable to pay with the comprehensive real estate tax has risen rapidly under the Moon Jae-in government as apartment prices rise.

In 2017, when the Moon government began, only 400,000 people were slapped with the tax, and collections amounted to 1.8 trillion won.

BY KIM DO-NYUN, LEE HO-JEONG [lee.hojeong@joongang.co.kr]