The government plans to eliminate the differential tax rates for the comprehensive real estate tax based on the number of homes owned, shifting the tax system to focus on property value. However, some experts warn that this reform could actually increase the tax burden gap between single-home and multi-home owners in certain price brackets.
According to reports from Yonhap News and others, the current comprehensive real estate tax applies different rates based on the number of properties owned. As a result, multi-home owners may face higher tax rates than single-home owners, even with the same taxable base. The law aims to enhance tax equity for high-value property owners.
The core of the government's proposed reform is to relax the criteria based on the number of homes and determine tax burdens primarily by property value. The intention is to reduce the tax burden disparity based solely on the number of properties owned, rather than applying a uniformly higher rate to multi-home owners.
However, comparing actual tax amounts reveals that the effects of the reform are not straightforward. For instance, when comparing a non-resident single-home owner with a non-resident multi-home owner, the tax difference at a property value of 2 billion won is approximately 5.99 million won, and at a value of 8 billion won, it rises to about 25.86 million won. This is due to existing deductions and other institutional mechanisms that still favor single-home owners.
Notably, the disparity in tax burdens between these two categories continues to widen as property values increase. The point at which the tax burden gap between a non-resident single-home owner and a non-resident multi-home owner decreases is around 13.4 billion won. This suggests that until this threshold is reached, the reform could actually exacerbate the tax burden difference between the two categories.
The government's emphasis on reducing the preference for owning a single high-value property, known as 'one good property,' must also be viewed in light of these institutional factors. Simply removing the differential tax rates for multi-home owners may not effectively mitigate the trend of concentrating assets in high-value properties. In fact, determining tax burdens solely based on property value, regardless of the number of homes owned, could yield relatively favorable or unfavorable outcomes for high-value property owners.
Differences based on residency status also play a significant role. A resident single-home owner and an investor with multiple homes may face different deductions and tax methods, even if the values of their properties are the same. Ultimately, to assess tax equity, it is essential to consider not only the tax rates based on the number of homes but also the deduction systems and residency requirements.
Feedback received during the legislative notice process could also influence the outcome. Reports indicate that over 2,000 opinions have been submitted regarding the comprehensive real estate tax amendment. Calls for expanding exceptions for actual residents or not classifying temporarily absent homeowners due to childcare or family care as non-residents have been voiced. The extent to which the government incorporates these opinions could alter the final tax burden structure.
A Ministry of Finance official stated, 'This comprehensive real estate tax reform aims to consider multiple factors, including residency status, number of homes, and property location, in the tax calculation process. While there may be some tax burden differences between a resident single-home owner and those with three or more homes, this is a result of designing the reform under the principles of establishing a resident-centered housing market, ensuring fair taxation, and enhancing tax equity.'
* This article has been translated by AI.
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