Comprehensive Real Estate Tax Threshold Sparks Controversy, Raising Concerns Over Retrieval of Rental Properties

Under the government's tax reform plan, the starting point for the increase in comprehensive real estate tax for owner-occupied single-family homes has been set at approximately 3 billion won in market value. For single-family homes valued below 3 billion won, the comprehensive real estate tax burden will decrease, while super-luxury homes valued at 3.5 billion won or more and non-resident single-family homeowners will face stricter taxation.

Analysis shows that the comprehensive real estate tax burden will increase for 30.85% of properties in Mapo District, 51.44% in Yongsan District, and 57.58% in Seongdong District. For owner-occupied single-family homes valued below 3 billion won, the comprehensive real estate tax will decrease from the current 910,000 won to 760,000 won in 2028, while for properties valued at 3.5 billion won, it will increase from 1,918,000 won to 2,124,000 won.

The basic deduction for non-resident single-family homeowners will be reduced from the current 1.2 billion won to 900 million won, creating a gap of up to 500 million won compared to owner-occupied single-family homes. Consequently, cases of non-resident single-family homeowners recalling their rental properties for self-occupancy have been observed.

The government explained that the reform plan focuses on improving tax fairness rather than stabilizing real estate prices. Article 1 of the Comprehensive Real Estate Tax Act clearly states that the objectives of taxation are to improve the fairness of tax burdens and stabilize real estate prices. The tax reform plan also includes a temporary easing of the capital gains tax surcharge for owners of multiple properties.

Kim Hyun-dong, a professor of business administration at Paichai University, expressed the opinion that a gradual increase in the effective tax rate for property ownership, regardless of residency status, would be effective in protecting tenants and stabilizing the market. Professor Kim explained that measures to benefit owner-occupiers after expanding the supply of public rental housing and stabilizing the real estate market would be an alternative to alleviate tenant anxieties.