South Korea Tax Forum Proposes Value-Based Property Assessment

Experts at a real estate tax reform forum held on the 16th proposed overhauling South Korea's property holding tax system to address disparities where owners of multiple lower-value properties pay more tax than single high-value property owners with equivalent total assets. The forum, part of a series preceding a comprehensive real estate debate scheduled for next Thursday, heard proposals to shift from unit-count-based taxation to value-based assessment. The government plans to announce tax reform measures as early as this month following the upcoming debate.

Experts Highlight Multi-Property Tax Penalty in Current System

Kang Seong-hoon, professor of policy studies at Hanyang University, presented data showing that an owner of a single 3 billion won apartment pays approximately 6 million won in holding tax this year, while an owner of three 1 billion won apartments with the same total value pays approximately 8 million won. The current holding tax structure applies higher rates to multi-property owners regardless of total asset value. Experts at the forum argued that taxation should be based on property value rather than the number of units owned.

Forum Participants Debate Holding Tax Rate Adjustments

Participants expressed differing views on raising holding tax rates. Nam Ki-eop, director of the Land Freedom Research Institute, stated that Korea's effective holding tax rate is one-third to one-fifth the level of major advanced countries, arguing that strengthening holding taxes cannot be characterized as punitive taxation. Ham Yeong-jin, head of Woori Bank's Real Estate Research Lab, warned that rapidly increasing rates could cause side effects including market lock-up, transaction volume decline, market rigidity, and tax pass-through to monthly rents due to reduced rental supply. One expert proposed a 40 billion won threshold for defining ultra-high-value single properties.

Government Schedules Forum and Tax Reform Announcement

The government will hold another real estate forum next Thursday. Officials stated they plan to announce tax reform measures as early as this month.

FAQ

What tax disparity did experts identify at the forum on the 16th? Experts pointed out that under the current system, an owner of a single 3 billion won apartment pays approximately 6 million won in holding tax, while an owner of three 1 billion won apartments (same total value) pays approximately 8 million won due to higher rates applied to multi-property owners.

When will the government announce tax reform measures? The government plans to hold another forum next Thursday and announce tax reform measures as early as this month.