1.2 mil. homeowners to be subject to ‘pricey home’ tax
A record 1.2 million homeowners this year will be asked to pay a tax which is disputed as a punitive measure against those owning a single “pricey home” or multiple homes, according to the government.
It is the first time more than 1 million homeowners will be subject to the so-called comprehensive real estate tax which was introduced in 2005. The tax agency started mailing out bills on Monday.
Aimed at preventing land speculation, the policy concerning the comprehensive real estate tax has been revised over the years in accordance with rising housing prices.
While many of the 1.2 million are average income earners with a single home, they are targeted for taxation as housing prices skyrocketed over the devastating failure of the previous Moon Jae-in administration’s real estate policies.
The latest policy stipulates a comprehensive real estate tax to be levied on owners of one home priced at 1.1 billion won ($809,000) or more, and also on owners of multiple homes with their combined state-assessed value exceeding 600 million won.
Housing prices have been cooling down nationwide lately due to steep interest rate hikes.
Nevertheless, the 1.2 million people own either one home or multiple homes that have exceeded the criteria.
The number of targeted taxpayers this year is a 29 percent increase from last year.
The government is expected to collect more than 4 trillion won from the comprehensive real estate tax this year, about 10 times more than five years ago.
The real estate tax regulation is anticipated to draw backlash from homeowners, and taking this into account, the government plans to raise the ceiling for taxation — 1.2 billion won for single homeowners, and 900 million won in combined state-assessed value for owners of multiple homes.