A notice on the revision of the comprehensive real estate tax is posted at a real estate agency in Songpa-gu, Seoul. yunhap news
Mr. A is a rental business with 26 houses nationwide. Of the 19 houses they own, the publicly announced housing price last year exceeded 600 million won. Originally, he would have to pay a comprehensive real estate tax of 260 million won. However, the tax levied on Mr. A is ‘0 won’. The current ending tax law is imposed at the published prices of houses at the beginning of the lease, because when Mr. A started the rental business in 2016-2018, the disclosed prices of these houses are in the range of 400 million to 600 million won.
Gyeonggi Province demands improvement of the requirements for tax exemption for rental business owners
Gyeonggi Province proposes to the government to amend the Enforcement Decree of the Final Tax Act
Gyeonggi Province announced on the 6th that it recently delivered a proposal to improve the combined exclusion of taxation tax to the Ministry of Strategy and Finance. This is a content requesting that the public housing price, which is the standard for exemption from taxation for housing rental businesses, be changed to the tax base date (June 1 of each year) rather than the starting date of rental. The purpose of this is to ask multi-homeowners who are exempt from the taxation tax even if the public price rises to pay the taxation tax reflecting the actual transaction price.
According to the current taxation tax law, when the sum of the published prices of houses owned as of the annual property tax tax base date exceeds 600 million won (900 million won per household), the final tax is paid. However, rental business owners pay the tax based on the start date of the lease, so if the house price at the time of the start of the lease was 600 million won or less, no matter how much the house price increases afterwards, you do not have to pay the tax. Currently, the official price of apartment houses in Gyeonggi-do rose by 3.98% on average from 2016 to 2020.
An official in Gyeonggi Province said, “The government is strengthening the requirements for rental housing and reducing tax benefits, but if the system improvement is not supported, existing rental companies will not continue to pay the lump sum tax.” It doesn’t fit the purpose or tax equity,” he said.
Rental operators expressed concern over this policy. Sung Chang-yeop, chairman of the Korea Housing Renters Association, said, “The real estate issue is being passed on to rental companies. Most of the rental companies are one-rooms, but they are misleading that all rental companies are doing rental business with apartments, saying that apartment prices are rising.
Jae-Myung Lee “The beneficial owners should be protected and the multi-homed people should be taxed strongly”
Jae-myung Lee, Governor of Gyeonggi Province. News 1
This suggestion is in accordance with Gyeonggi Governor Lee Jae-myeong’s usual opinion that “one living house should be protected by reduction or exemption and strong taxation for multi-homed people.” Earlier, on the 3rd, the Governor posted on his social network service (SNS) on the 3rd, saying, “After registering as a housing rental business, officially owned rental houses amount to 1.6 million units, equivalent to five in one million new cities. He expressed his intention to pursue the plan.
On the other hand, the Governor Lee posted an article on social media on the day titled “To prevent water from pouring into the poison underneath high-density development in the city,” and gave an opinion on the high-density urban development, which is being discussed around the ruling party. As conditions for high-density development, he suggested: ▶Preceding measures to eradicate speculation ▶Prohibited in principle of private development ▶Established a supply plan to expand basic housing, etc. “He said.
Reporter Choi Moran [email protected]