After the government unveiled a real estate tax overhaul centered on increasing the tax burden on ultra-high-priced and non-residential single dwellings, public legislative comments calling for fixes have poured in.
According to the Ministry of Government Legislation's National Participation Legislative Center on the 9th, the "Act on the Partial Amendment of the comprehensive real estate tax Act" that the Ministry of Economy and Finance preannounced on the 4th received 2,237 public comments. The bill to partially amend the Income Tax Act, which would convert the long-term "holding" special deduction into a long-term "residency" income deduction, also drew 1,457 comments.
One of the main public comments is a request to recognize cases where people were unavoidably unable to reside in their home. The government said that if a single-home owner who has lived for more than one year in a dwellings moves to another city for unavoidable reasons such as schooling, a job change, or illness, the resulting non-residency period will be counted as residency. Such exceptions will be recognized for up to three years.
Relatedly, there were comments asking that exceptions also be recognized when a person lives elsewhere to care for family, such as child-rearing. If so, even when grandparents transfer to the area where their children live to care for grandchildren, an exception could be recognized.
On this, Koo Yun-cheol, Deputy Prime Minister and Minister of the Ministry of Economy and Finance, appeared on MBC Radio on the 7th and said, "If there are parts that are 'inevitable,' we are trying to look at them from the public's standpoint." But on the length of any exception, Koo said, "Basically, if we make it too broad, people may start thinking on another level (which could invite tricks)."
The government also said newly built dwellings acquired through redevelopment or reconstruction would have only half of the publicly announced price-related period recognized as residency because it stems from a maintenance project. On this, there were comments asking that when residents relocate for an extended period due to remodeling work, the residency period should be partially recognized, as with reconstruction or redevelopment.
There were also calls to raise the basic comprehensive real estate tax deduction for single-home owners with a home in joint spousal ownership. The government announced it would raise the basic deduction threshold for the comprehensive real estate tax from a publicly announced price of 1.2 billion won to 1.4 billion won, but kept the basic deduction for joint spousal ownership at 900 million won each.
The government plans to review the public comments and finalize the tax overhaul plan after incorporating items to be reflected. It then aims to bring it to a Cabinet meeting on the 1st of next month and submit it to the regular National Assembly session. The content may be revised during parliamentary deliberations, and ultimately the law will be implemented based on the bill that passes the National Assembly.