The difference in comprehensive real estate tax between single-home owners and owners of three homes is set to widen starting in the year after next under the government's tax law revision bill, according to findings on the 9th.
Currently, the comprehensive real estate tax gap between single-home owners and owners of three homes is 200,000 won based on an apartment market price of 1.4 billion won. This is before property tax and holding-period/age deductions and without applying the tax burden cap, and for three homes, the standard is the sum of the market prices of each home.
The difference in comprehensive real estate tax between single-home and three-home owners grows as the apartment market price rises. If the market price is 2 billion won, owners of three homes pay 900,000 won more in comprehensive real estate tax than single-home owners. At 3 billion won, the gap widens to 1.57 million won.
If the comprehensive real estate tax overhaul is completed in 2028 as outlined in the tax law revision, the gap will generally widen compared with now. That is because the difference in basic deductions will grow compared with the current system, and the fair market value ratio for owners of three or more homes will be applied 10 percentage points higher than for single-home owners (70%). Only when the market price is a little over 10 billion won does the gap narrow compared with the current system. This is based on an analysis divided broadly into four types by the number of dwellings and residence status.
Looking specifically at the types, the first type is when neither the single-home owner nor the three-home owner lives in the dwellings they own. In this case, the comprehensive real estate tax difference in 2028 is 5.99 million won when the market price is 2 billion won and 7.67 million won at 3 billion won. As the market price rises, the tax gap grows larger than under the current system, and only when the market price reaches 13.4 billion won does it become 49.38 million won, which is 110,000 won less than the current 49.49 million won.
The second type is when the single-home owner resides in the home and the three-home owner resides in one of the dwellings owned. In this case as well, the gap with the current system only begins to narrow when the market price reaches 14.8 billion won.
The third type is when the single-home owner does not live in the dwelling owned, but the three-home owner resides in one of the dwellings owned. In this case, even though the three-home owner lives in an owned dwelling, the tax burden increases significantly compared with the nonresident single-home owner. The gap with the current system narrows only when the market price reaches 9.5 billion won.
The fourth type is a resident single-home owner and a nonresident owner of three homes. The inflection point at which the tax difference between the two narrows compared with the current system is a market price of 15.8 billion won.
For single-home owners, 1.4 billion won is deducted if residing and 900 million won if not residing. For multiple-home owners, the calculation is a bit more complex: "400 million won + 500 million won × (value of the dwelling of residence ÷ combined value of dwellings owned)" is the basic deduction. The deduction amount varies depending on the share of the dwelling of residence in the combined value of dwellings owned. The four scenarios above assume the person lives in a home equal to one-third of the combined value.
In overhauling the comprehensive real estate tax, the government said it would seek tax equity based on value, not the number of homes owned. Currently, a person with one 3 billion won home bears a smaller tax burden than a person with three 1 billion won homes, and the government intends to adjust this. However, unless the deduction is substantial, this overhaul is unlikely to significantly narrow the tax gap between single-home owners and owners of three homes.