Real estate tax burden on low-income retirees exaggerated, says report

A recent report challenges the notion that South Korea's comprehensive real estate tax disproportionately burdens elderly homeowners with low incomes. Research by the National Assembly Futures Institute indicates that among single-home owners subject to the tax, fewer than 5% belong to the bottom 40% of income earners. Instead, a significant majority, 60.2%, fall into the top 10% of income earners, and 74.1% are in the top 20%.

The study, which analyzed data from the 2024 Housing Survey combined with external administrative statistics, found the average annual income for these targeted households to be 95.08 million won (approximately $68,000 USD). The report explicitly states that these households are "clearly high-income groups," casting doubt on arguments for tax relief based on liquidity constraints for owners of high-value homes.

Furthermore, the average age of the primary household earner among these single-home owners subject to the tax is 58.8 years, identical to the average age of all single-home owners. Contrary to the assumption that owners of expensive homes are older, the findings suggest the typical profile is a middle-aged, high-income individual residing in Seoul. In fact, 85.9% of these taxpayers live in Seoul, with the figure rising to 96.7% for the greater Seoul metropolitan area.

While 46.7% of these homeowners receive elderly tax credits and 79.3% benefit from long-term holding deductions, the report highlights that the most substantial benefits, including up to 80% in deductions, go to high-asset, high-income elderly households, not those with limited financial capacity. The average income for those receiving the maximum deduction was 73.48 million won, placing them in the top 15% of all households.