[Financial News] Deputy Prime Minister and Minister of Strategy and Finance Koo Yoon-chul hinted at strengthening the holding tax (property tax and comprehensive real estate tax) paid by a landlord. This is because the current real estate tax is difficult to "transact" due to the high transaction tax (transfer income tax) paid when selling a house, while the holding tax is low.
Rather than selling the house, the phenomenon of owning it prevents the real estate circulation. However, a cautious approach is expected as some ruling party lawmakers oppose strengthening the holding tax and there is still a "trauma" to the surge in housing prices during the Moon Jae In government.
Deputy Prime Minister Koo visited Washington, D.C., on the 16th (local time) to attend the G20 Finance Ministers' Meeting and held a meeting with accompanying reporters and said, "Real estate holding tax may be a real estate policy or part of the principle of 應能負擔."
The responsiveness burden principle refers to the tax principle that fair taxation should be made according to the taxpayer's ability to bear. This can be interpreted to the effect that strengthening the holding tax is necessary for fair taxation.
With the announcement of the "October 15 Housing Market Stabilization Measures," the government decided to push for research services on the direction of tax operation, including adjustment of ownership tax and transaction tax.
Deputy Prime Minister Koo said, "In Korea, real estate ownership tax is low and transfer tax is high, so the Lock-in Effect is very large," adding, "Since the capital gains tax paid when selling is high, there is a phenomenon of continuing to hold the house without selling it."
"If the burden of owning a high-priced house is high, we will sell the house, and there will be liquidity in the real estate market," he said. "If you pay an average of 1% of property tax like the U.S., you will have to pay 50 million won in holding tax a year if the house price is 5 billion won."
"Not only multi-homeowners but also high-priced homeowners should see it together," he said. "For example, if a person with three 500 million won homes pays more ownership tax than a person with a 5 billion won house, we need to examine what fits the equity."
"Since we should not rush to strengthen the holding tax, we will proceed with research services and collect expert opinions," he said. "We will consider what consistency the real estate tax system should be operated throughout the acquisition, possession, and transfer stages."
However, the move to strengthen the holding tax is not expected to appear immediately.
This is because there is also opposition within the ruling party, and there is still a view that the cause of the surge in housing prices during the Moon Jae In administration is excessive regulation.
On the same day, Jeon Hyun-hee, a senior member of the Democratic Party of Korea, pointed out at a press conference at the National Assembly, "It is actually a clumsy policy to prevent price hikes with real estate ownership tax."
A task force (TF) involving related ministries such as the Ministry of Strategy and Finance, the Ministry of Public Administration and Security, and the Ministry of Land, Infrastructure and Transport is expected to push for real estate tax reform from a mid- to long-term perspective.
The Ministry of Strategy and Finance is in charge of comprehensive real estate tax and capital gains tax, the Ministry of Public Administration and Security is in charge of property tax and acquisition tax, and the Ministry of Land, Infrastructure and Transport is in charge of official prices. The overall sketch is likely to be included in next year's tax reform plan, which will be announced after the local elections in June next year.
In response to the recent KOSPI crossing the 3,700-point mark, Deputy Prime Minister Koo said, "This is because the government is pursuing strategies and policies for the value of the capital market and productive finance." Regarding the government's plan to maintain the current 5 billion won standard for major shareholders of capital gains tax to revitalize the stock market and consider adjusting the maximum tax rate for dividend income, he said, "The intention is to resolve the 'Korea discount' through policy changes and ease the phenomenon of funds being concentrated only on real estate. However, I don't think these tax measures are light in light of the principle of responsiveness burden."
Reporter Choi Yong-joon ([email protected] )
According to this logic, you shouldn't own a house.
Instead, it would be better to implement it on a trial basis with public officials.
In the sense of setting an example, I think we can watch it for a few years at 1%.
I don't know what logic it is to add ownership tax to acquisition tax, registration tax, capital gains tax, property tax, and comprehensive real estate tax again.
In addition, it is reflected in health insurance premiums.
Private businesses are already paying a significant holding tax.
Policymakers who don't know anything about taxes are the most problematic.
What level of countries are paying ownership tax, what about other tax systems,
How do you pay for social insurance
I'll bet 500 won that he has no idea.
Korea's economic bureaucrats are less than three.