Paying 50 Percent More in Possession Tax Next Year

From next year, those who own more than 900 million won worth of housing according to the National Tax Service’s standard market price, which is 70 to 90 percent of market price, will have to pay one to three percent of the amount exceeding 900 million won as a general real estate tax.

One to four percent of land without buildings that total 600 million won according to the property appraisal price and 0.6 to 1.6 percent of industrial land priced greater than four billion won will have to be paid as a general real estate tax.

Those who are not subscribed to pay a general real estate tax will now pay 0.15 to 0.5 percent of housing value, 0.2 to 0.5 percent of land without buildings, and 0.2 to 0.4 percent of industrial land as property tax.

The government and the Uri Party announced that they opened a high-level meeting yesterday to decide on this real estate taxation system agenda and that they are planning to initiate the plan from next year if this agenda is passed this year.

According to the agenda, 60,000 people owning high priced real estate properties will have to pay 600-700 billion won on top of property tax as a general real estate tax. Other taxpayers need only to pay property tax. Next year’s national possession tax is expected to rise 10 percent to 3.5 trillion won.

As a nation, 70 percent will experience decreased possession tax, however, those who own high priced housing near the metropolitan area will see a 50 percent rise.

For a 73 pyong apartment in Gangnam, which costs 1.6 billion won according to the standard market price, the owner had to pay 3,060,000 won as property and general real estate tax this year. However, next year, the owner will have to pay property tax of 3,750,000 won and general real estate tax of 1,750,000 won, a total of 5,500,000 won.

According to the agenda provided by the government and the Uri Party, for property tax paid by owners of housing less than 900 million won (standard market price), three levels of progressive tax rates are applied: 0.15 percent for less than 80 million won, 0.3 percent for 80-200 million won, and 0.5 percent for over 200 million won.

Following this change of tax rates, the minimum tax rate has fallen from 0.2 to 0.15 percent. However, because the taxable amount has increased to 50 percent of the National Tax Service’s standard market price, tax payments as a whole increased for everyone.