Reducing the Right of the Self-Governing Body Heads to Adjust Property Tax Assessment Standards

The government is developing stern policies to counteract resistance from local self-governing bodies in Gangnam, Seoul regarding the government’s policy on adjusting assessment standards of property tax on December 9, including policies to combat resistance to the reduced right of local self-governing body heads to adjust the property tax assessment standard.

Minister of Government Administration and Home Affairs Huh Sung-kwan wrote in a report entitled “Promotion Progress in Improving Assessment Standards of Buildings for Property Tax,” that was submitted to the cabinet council that day, “The heads of the local self-governing bodies in Gangnam are opposing this out of consideration for their political position [with their candidacy in the upcoming general election], but determination of assessment standards is the right of the city, county, or district government. If [the self-governing bodies] do not accept the government’s bill, there is no instrument to restrain this.”

Minister Huh said, “If it is seen that the improvement goal cannot be achieved because of the opposition from the Gangnam area, we are considering methods to decrease the property tax rate adjustment range of the self-governing body heads, from the current 50 percent to 30 percent, through amending related laws.”

In addition, Minister Huh said that he is considering methods to disadvantage the opposing self-governing bodies when distributing part of the newly established comprehensive real estate tax that is levied on the individuals who own excessive housing or land.

The ministry is known to have considered methods to transfer the right to determine property tax assessment standards from the self-governing body heads completely to the central government, because they could lose the equitable balance of taxation between Gangnam and Gangbuk, and between Seoul and the provinces if they accept the arguments made by some districts about the adjustment.

However, Minister Huh has said, “The property tax of the apartment owners in Gangnam increases by seven times at the most, but we will try our best to persuade them first since we believe that they are able to pay for the tax.”

Jong-Hoon Lee taylor55@donga.com