A recent study has found that the government's revision of the comprehensive real estate tax has led to a concentration of wealth among multiple homeowners in high-value properties in the metropolitan area.
According to a report by the National Institute of Public Finance titled 'Analysis of Effective Tax Rate Disparities by Number of Homes and Changes in Housing Ownership Structure,' the effective tax rate gap between multiple homeowners and single homeowners has widened to 0.71 percentage points, a 2.4-fold increase over the past year since the 2020 tax reform.
The tax reform implemented around 2020 aimed to increase the tax burden on multiple homeowners while expanding basic deductions for single homeowners and tax credits for seniors and long-term property holders.
As a result, the effective tax rate for multiple homeowners rose to 1.21% in the following year, more than doubling from 0.59% the previous year. In contrast, the effective tax rate for single homeowners increased only from 0.30% to 0.50%. The gap in effective tax rates between the two groups reached its highest level of 0.71 percentage points between 2015 and 2024.
During this period, statistics on housing ownership revealed that the number of single homeowners nationwide increased by 438,936 in 2021, while the number of multiple homeowners decreased by 46,393. The trend of increasing multiple homeownership, which had been rising until 2019, shifted to a slowdown and eventual decline following the tax reform.
This trend was particularly pronounced in Seoul. Since 2020, the number of multiple homeowners in Seoul decreased by 1.77%, and in 2021, the decline was nearly double the national average at -3.83%.
Kim Jin-wook, the lead researcher, explained, "Seoul has been designated as a regulated area since 2017, which likely means that multiple homeowners in regulated areas felt the impact of increased tax rates earlier than those in other regions."
Analysis of individual housing ownership changes by the National Data Agency showed that between 2020 and 2021, 328,000 individuals transitioned from being multiple homeowners to single homeowners, while 283,000 made the opposite transition. This reversal has only occurred during this specific period in the last five years.
This indicates that taxpayers adjusted the number of homes they owned in response to changes in the tax system. The phenomenon of concentrating assets into a single property, referred to as 'one good house,' can be seen as a result of the tax system differentiating tax burdens based on the number of properties owned.
Experts warn that if this imbalance is not addressed, the incentive to concentrate assets into high-value single properties to evade regulations on multiple homeownership will continue, potentially exacerbating price pressures on high-value homes in the metropolitan area.
Kim suggested, "The ongoing discussions in government and academia regarding a shift in the comprehensive real estate tax assessment criteria towards asset value should be considered in light of these concerns. Additionally, measures to reduce deductions and exemptions for high-value single homeowners should be prioritized."
* This article has been translated by AI.
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