There are calls for expanded government support to address the issue of vacant homes, which are exposed to risks of safety accidents and crime. It is argued that the government must establish an integrated approach to the management of vacant homes and secure a realistic budget for this.
In particular, property taxes on the land can increase by up to 800% after the demolition of a vacant home. Experts have pointed out that given the current situation obstructing the management of vacant homes, tax incentives should be considered to encourage the management of these properties.
◇Expanding the role of central government… need for increased budget for vacant homes
A systematic and long-term strategy is needed from the government for the management of vacant homes. Other countries facing vacant home issues are developing platforms for management and transaction of vacant properties through collaboration between the central government and local governments. However, in this country, only local governments are testing transaction platforms or introducing their own management support programs for vacant homes, indicating the need for an integrated response from the central government.
A government official noted, "To solve the vacant home issue, it is crucial to have a lot of discussions between the government and local governments," adding that through recent councils of city and provincial governors, they have been sharing opinions on solving the vacant home problems. He also stated that there is ongoing work to strengthen the central government's role concerning vacant homes in related legislation.
There are suggestions for the central government to prepare measures along with increasing the budget for vacant homes. Although the government is investing in the management of vacant homes, the proportion of budget input from local governments remains significant. Consequently, sufficient support for the costs of demolishing or improving vacant homes is lacking. Currently, the government supports between 5 million to 10 million won for the demolition of a vacant home, but the budget is insufficient to demolish all increasing vacant homes. A rough calculation indicates that nearly 2 trillion won is needed for the demolition of vacant homes.
Professor Seo Jin-hyung from Korea University of Information and Communication noted, "In the case of vacant homes, they become vacant due to owners leaving them unattended for extended periods or due to a mismatch between their income level and housing conditions," adding, "The government should invest in managing vacant homes with punitive measures to prevent them from degrading the living environment."
◇Strategies for revitalizing regions after the management of vacant homes must be established
When the government implements vacant home management policies, there is an opinion that strategies should be differentiated between urban and rural areas. Choi Jung-hyun, a senior researcher at the Chungnam Research Institute, stated, "When addressing the vacant home issue, we need to approach vacant homes differently in urban and rural areas," explaining that in cities, instead of merely leasing vacant homes and returning them later, options should be considered for acquiring and supplying housing for vulnerable populations through new construction or remodeling in accessible locations.
Choi further stated, "In rural areas, the management project should focus on demolition," while emphasizing that this project should not end with demolition but should later utilize the land to create positive effects for the community, such as supplying public facilities or mixed-use facilities to enhance housing effects.
There is a prevailing view that cooperation between the public and private sectors must increase regarding the use of vacant homes after their management. A representative from the vacant home management industry commented, "Management of vacant homes cannot be achieved solely by private companies, as it's challenging to obtain cooperation from owners," noting that if local governments have regeneration plans for villages with vacant homes and collaborate with private sectors, the utilization of vacant homes could increase.
While the vacant home issue currently focuses on single-family homes, there are concerns that if the slumification of apartments progresses in the future, recovery will be difficult, necessitating long-term strategies for this issue. An industry insider noted, "If vacant homes occur in apartments, demolition or management becomes more challenging," and stated that similar to overseas practices, where additional taxes are levied on abandoned villas or apartments, South Korea should also consider these options in advance.
◇Tax incentives to encourage the demolition of vacant homes… be cautious about levying vacant property taxes
Criticism has arisen that a revision of taxes regarding the demolition of vacant homes is necessary. Currently, after the demolition of a vacant home, land property tax is levied on the land. This tax is found to be 200-300% higher on average compared to the residential property tax that applied to the vacant home. As a result, even if owners incur separate expenses for demolition, the increased tax leads to a diminished incentive to demolish vacant homes. Therefore, it is argued that tax relief should be provided for property taxes when demolishing vacant homes to encourage their management.
Heo Won-je, a researcher at the Korea Local Tax Research Institute, explained, "For vacant homes, residential property taxes are assessed, but once demolished, they become land and are subjected to land property taxes," adding, "Property taxes can rise significantly; based on findings from Jeollado and Incheon, we found increases of up to 800%." He continued, "No matter how polluted the surrounding environment is, from the owner's perspective, it is understandably more rational to leave the vacant home as it is," noting that in many cases, the public assessment of vacant homes is low, resulting in annual taxes of only a few tens of thousands of won.
He also stated, "There is a need for measures to relieve property taxes for lands that have become vacant, as the burden of property taxes grows. We need to work on gradually alleviating the factors that lead to the abandonment of vacant homes by reducing property tax burdens to encourage demolitions."
There are also opinions that if vacant homes are left unattended, the risks of fire and crime increase, suggesting that there should be additional burdens such as emergency service facility taxes. Heo noted, "The risk of accidents with vacant homes is higher than with managed homes, which incurs significant public costs. We should consider a 'carrot and stick' approach where vacant home owners are additionally burdened with emergency service facility taxes for the resources going toward these properties that are left unattended."
There are claims that South Korea should consider the vacant home taxes being implemented in other countries such as the United Kingdom and Japan, which are also facing vacant home problems. Currently, in the United Kingdom, a vacant home premium system is in place, allowing local governments to impose additional taxes on homes left vacant for over two years. Moon Seung-kyu, representative of the startup Blank, remarked, "Even when the government and local governments invest in business costs for vacant homes, there remains a significant reluctance from owners to utilize these properties," emphasizing that there should be a system enabling the use of such homes, including imposing taxes like vacant home taxes.
However, there are opinions that vacant property taxes should only be imposed on properties held for speculative purposes. Heo stated, "I believe vacant property taxes should be imposed only on such homes with speculation intentions," asserting that since property taxes are already being levied on vacant homes, creating a new tax category could impose additional burdens, necessitating careful consideration of implementing such taxes solely to prevent the speculation of vacant homes.