While the government is contemplating measures to increase tax burdens on ultra-high-priced housing, it has emerged that property tax bills for expensive homes in the Hangang Belt reached an all-time high this year—even without any adjustment to tax rates.
According to simulations by Woobyeong Tak, a senior specialist at Shinhan Premier Pass Finder, released on the 29th, property tax calculations for nine complexes with publicly announced prices exceeding 3 billion won in the Gangnam three districts and Yongsan District revealed that the property tax for five of those complexes hit a historic high this year. Among them is Hannam The Hill in Yongsan District.
The sharp rise in property tax liability stems from the surge in home prices, particularly in the Hangang Belt, since last year. As the government is expected to introduce targeted tax hikes for ultra-expensive homes, experts predict the tax burden on high-end property owners will further intensify going forward.
Some have suggested differentiating the standard market value ratio for comprehensive real estate tax—lowered to 60% under the Yoon Suk-yeol administration—according to the number of homes owned, or by price tier, thereby increasing the comprehensive real estate tax. The standard market value ratio reflects the proportion of the assessed property value, after basic deduction, that is actually subject to taxation. There have also been discussions about creating a separate tax base segment within comprehensive real estate tax to further increase tax rates for ultra-high-priced properties.
There is also talk of raising the upper limit for tax burdens from the current 150% to as high as 300%. This upper limit system is designed to prevent a sudden spike in tax liability, such that if this year’s calculated tax bill exceeds a certain percentage of the previous year’s amount, the excess is not collected.
Notably, under the Moon Jae-in administration, the cap had been raised to 300% for those with two or more homes in regulated areas, or three or more homes in unregulated areas, before being lowered to 150% under the Yoon Suk-yeol administration.
Woobyeong Tak commented, “It is important to keep in mind that even under the previous administration, rapid increases in tax burdens during periods of quickly rising market prices led to strong public backlash against the tax policy.”