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🇰🇷 South Korea /Economy & Trade

South Korea to ease property tax for single-home owners, increase burden on multi-home owners

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

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  • Deputy Prime Minister and Minister of Finance and Economy, Gu Yun-cheol, stated that the government's property tax reform will focus on the principle of "ability to pay."
  • The reforms aim to reduce tax burdens for middle- and low-income households who are owner-occupiers of a single home, while increasing the burden on non-resident property owners and those with multiple homes.
  • The government plans to offer additional tax credits for single-home owner-occupiers and is considering measures like expanding monthly rent tax credits to address rising rental prices.

South Korea's Deputy Prime Minister and Minister of Finance and Economy, Gu Yun-cheol, outlined the government's approach to upcoming property tax reforms, emphasizing the principle of "ability to pay." This means tax burdens will be adjusted based on an individual's capacity to bear them, aiming for greater fairness in the tax system.

(The property tax revision) is not to stabilize housing prices, but to implement the principle of ability to pay (taxation based on the taxpayer's ability to pay).

— Gu Yun-cheol, Deputy Prime Minister and Minister of Finance and EconomyGu Yun-cheol explained the fundamental principle guiding the government's property tax reforms.

The core of the reform strategy is to provide increased support and reduce tax burdens for middle- and low-income households who own and reside in a single home. Conversely, the government intends to impose a "reasonable burden" on those who do not reside in their properties or own multiple homes. This policy direction aims to stabilize the housing market and ensure more equitable distribution of tax responsibilities.

"The goal of the (property tax) revision is not to stabilize housing prices, but to implement the principle of ability to pay," Gu stated during a National Assembly Finance and Economy Committee meeting. He further elaborated that the upcoming tax reform package, expected in early August, will focus on providing support for owner-occupied homes while increasing the burden on non-resident and multi-home owners.

For homes that people live in, we will provide more support for housing stability, and for homes that people do not live in, we will impose a reasonable burden.

— Gu Yun-cheol, Deputy Prime Minister and Minister of Finance and EconomyGu Yun-cheol clarified the differentiated approach to taxation for owner-occupied versus non-resident properties.

Gu also addressed concerns about the perception of punitive taxation, assuring that the government is preparing "diverse and reasonable measures" to avoid such impressions. Regarding rental market policies, he indicated a focus on increasing the supply of non-apartment housing in the short term. The government is also exploring various support measures, including tax credits and financial benefits, to mitigate the impact of rising rental prices, with an expansion of monthly rent tax credits anticipated in the reform plan.

We are preparing diverse and reasonable measures so that the public does not perceive the property tax rationalization as punitive.

— Gu Yun-cheol, Deputy Prime Minister and Minister of Finance and EconomyGu Yun-cheol assured that the upcoming tax reforms would be implemented in a fair and balanced manner.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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