코리아타임즈 Real Estate Tax System

[아톰]

Real Estate Tax System Proper Measures Needed to Minimize Taxpayers' Resistance

Under the agreement to introduce a comprehensive real estate tax system, which imposes heavy taxes on wealthy people possessing real estate from next year, the government and the Uri Party have decided to submit a draft for the revision of the property tax system to the National Assembly within this month. Although there are differences in the views of the government and the ruling party over the scope of targets for heavy tax and the gap for easing the tax burden, the draft is expected to pass through the National Assembly sooner or later for implementation from next year. The planned new taxation system came as part of a series of powerful government measures to stabilize real estate prices, which was announced on Oct. 29 last year. Among other things, it calls for combining comprehensive land tax and property tax, which have been imposed by local governments, into housing tax. In addition, it requires the imposition of comprehensive real estate tax, a type of national tax, on those possessing real estate exceeding a certain level. In a nutshell, the new tax system is designed to crack down on real estate speculation and adjust unreasonable local tax systems by raising taxation on those who own large amounts of real estate. The government is reportedly considering imposing comprehensive real estate taxes on those who own real estate worth a combined total of over 2 billion won in terms of market value. The number of people subject to the imposition of such a tax is expected to range from 50,000 to 100,000. As the government also plans to drastically jack up the application rate of taxation to 50 percent of the standard price designated by the National Tax Service, which is almost the same as actual transaction prices, the tax burden is also likely to soar to two or three times the present level. Although the government and the ruling party are moving to reduce the tax burden through tax deductions or the lowering of real estate acquisition and registration taxes, the new tax system is expected to lead to strong resistance from taxpayers. Nevertheless, the new real estate taxation system should be implemented as scheduled to root out real estate speculation and stabilize housing prices. As all of us are well aware, the government has achieved its target of curbing real estate speculation and pulling down housing prices with the implementation of the Oct. 29 measures. However, the government needs to take proper steps to minimize taxpayers’ resistance, including cuts in real estate acquisition and registration taxes.