As the government pushes a tax overhaul to strengthen real estate holding taxes, an analysis found that if the fair market value ratio for the comprehensive real estate tax is raised to 80% from the current 60%, the average comprehensive real estate tax on dwellings per person would increase to 6.24 million won from 3.24 million won. The fair market value ratio is the percentage multiplied by the posted price when determining the taxable base for holding taxes.
According to data the National Assembly Budget Office submitted on the 9th to Rep. Lee Jong-uk of the People Power Party, a member of the Land Infrastructure and Transport Committee, this year's holding tax on dwellings is estimated at 869.95 billion won if the current 60% fair market value ratio is applied. The property tax amounts to 722.33 billion won, and the comprehensive real estate tax totals 147.63 billion won.
However, if this ratio is raised to 80%, the holding tax would rise 15.7% to 1.00658 trillion won. If a 95% fair market value ratio is applied, the holding tax is estimated to increase 23.8% to 1.07726 trillion won.
The budget office projected that raising the fair market value ratio would also significantly increase the burden per taxpayer. Based on 455,331 people subject to the comprehensive real estate tax in 2024, the average comprehensive real estate tax on dwellings per person is currently 3.24 million won. Applying an 80% fair market value ratio would raise it to 6.24 million won, or 1.9 times higher, and applying 95% would raise it to 7.8 million won, or 2.4 times higher.
By region, the budget office said the tax burden on dwellings in Seoul and Gyeonggi would rise sharply. Seoul's holding tax is 451.91 billion won under the current fair market value ratio, and raising it to 80% would increase it 21.1% to 547.21 billion won. Applying 95% would raise it 31.9% to 595.95 billion won. In Gyeonggi, the holding tax is 203.77 billion won under the current system, and raising the ratio to 80% would increase it 10.8% to 225.8 billion won. Applying 95% would increase it 16.3% to 237.07 billion won.