1 house + 1 lot of households, if you sell a house within 3 years, transfer tax is calculated as 1 house

Lim Jae-hyun, head of the taxation department of the Ministry of Information, is giving a briefing on the 5th of the last month. [뉴스1]

If a household who owns a house sells an existing house within 3 years after obtaining an additional sale right, it is regarded as one house when the government calculates capital gains tax. 1 When a homeowner sells a house, they do not have to pay a transfer tax up to 900 million won (requirements for retention and residence are separate). The government also decided to start a research service on the reform of the inheritance tax. However, the government’s position is that the research service is not premised on lowering the inheritance tax.

On the 6th, the Ministry of Strategy and Finance announced an amendment to the Enforcement Decree of the Tax Law. The Ministry of Science and Technology decided to revise the tax law last year and include the right to sell in the number of houses when calculating the transfer tax from this year. Until last year, if there was only one house in possession, no matter how many rights to sell, it was considered as one house, but from this year, this means that such people are considered multi-homed. In this way, in the regulated areas (regions subject to adjustment, etc.), households with’one house + one sale right’ also apply the heavy transfer tax. 2, 10% points are added to the basic transfer tax rate (6~25%) for the homeowner, and 20% points are added to the 3rd house.

However, the Ministry of Knowledge Economy decided to amend the enforcement decree so that temporary’one house + one sale right’ households would not pay excessive taxes.

Investors who earn more than 2.5 million won per year by selling cryptocurrencies such as bitcoin starting next year will have to pay 20% of the excess of 2.5 million won in tax. For example, if an investor earns 10 million won in cryptocurrency, the government charges 1.5 million won, 20% of 7.5 million won, as a tax. Lim Jae-hyun, head of the tax office of the Ministry of Information, explained, “If the income of virtual assets (cryptocurrency) exceeds 2.5 million won per year, if you do not report income tax, additional tax will be imposed.” From next year, you will also have to pay taxes when you take over cryptocurrency as an inheritance or gift.

When the stock market regards it as the largest shareholder and imposes income tax, the standard amount will be maintained at 1 billion won until the end of 2022. Add up the stock holdings of spouses and children. “If the abolition of the (majority shareholder) family summation, the result will be contrary to the direction of (policy) that improves taxation equity,” said Lim said.

Starting this year, if you invest in a publicly offered’New Deal Infrastructure Fund’, you can receive tax benefits on dividend income. Originally, 14% of dividend income should be paid as tax, but if the investment principal is less than 200 million won, only 9% of dividend income is paid as tax. However, only funds that invest 50% or more in projects approved by the New Deal Infrastructure Review Committee are subject to tax benefits.

In a press briefing, Mr. Lim said, “Last year, there was a request for a review of a plan to improve the inheritance tax at the regular parliamentary opinion. “I am going to do research service this year.” It is meaningful in that the Ministry of Information, which had been in a reserved position so far, has officially started to look into the issue of inheritance tax.

Last year, the National Assembly’s Planning and Finance Committee adopted a contingent opinion in the ‘2021 Preliminary Examination Report’ to review the rational improvement of the overall inheritance tax. It is intended to protect the interests of entrepreneurs from foreign speculative capital and revitalize the domestic economy.

“There are some opinions that (the inheritance tax) is too high, and on the contrary, some people think that lowering the inheritance tax rate is a retreat in terms of tax reform, given the level of income distribution and asset inequality in our society.” He added, “We believe that lowering the inheritance tax rate can be adjusted only if the consensus of many people is formed.”

Currently, the highest inheritance tax rate is 50%, the second highest among OECD member countries after Japan (55%). Taking into account the maximum shareholder’s premium (20% of the inheritance tax), the actual maximum inheritance tax rate reaches 60%. In the case of the late Samsung Chairman Lee Kun-hee, the inheritance tax amount for shares was confirmed to be about 11.4 trillion won. This is the amount obtained by applying the highest inheritance tax rate, the largest shareholder premium rate, and the voluntary report deduction rate (3%) to the value of the shares held by Chairman Lee.

Tax experts believe that the current government is unlikely to cut the inheritance tax rate. The ruling Democratic Party is negative about the inheritance tax cut, and the government needs to increase tax revenues to expand fiscal spending. Another obstacle to lowering the inheritance tax is that there is a lot of antipathy from the public against the ‘great inheritance of wealth’.

However, experts believe that there is a possibility of restructuring the system at the level of easing the deduction amount and conditions of inheritance tax or delaying the payment deadline for inheritance tax on property inherited as a condition of the succession of the family business.

Sejong = Reporters Hae-yong Son and Seong-bin Lim [email protected]