Double the multi-household tax, up to 70% of the transfer tax… Real estate system that changes in the new year

Six bold real estate measures came out this year. In particular, real estate-related taxes are complicated by varying tax rates and deduction conditions several times. Although it was announced this year, there are many regulations that will actually be implemented next year. I organized them by item.

▶Change of tax rate and upper limit= The comprehensive real estate tax rate will increase from January next year. For holders of 2 houses or less, the tax rate is increased by 0.1 to 0.3 percentage points for each tax base section. Those with three or more houses or two houses in the area subject to adjustment increase by 0.6 to 2.8 percentage points for each tax base section.

The highest individual tax rate is applied to corporate-owned housing, excluding dormitories. 3% for 2 houses or less and 6% for 3+ houses. When determining the tax base, the ratio of the fair market value applied to the published housing price will also increase from 90% this year to 95% next year.

The upper limit on the tax burden is also raised. The upper limit of the tax burden for two houses in the area subject to adjustment is raised from 200% to 300%. For corporate-owned housing, the upper limit on tax burden will be eliminated and the basic deduction for KRW 600 million will be abolished.

▶Change of deduction rate and deduction method=From January next year, the deduction rate for the elderly will increase. 1 The tax deduction rate for senior citizens who are homeowners (real demand) increases by 10 percentage points for each section. The limit of the combined deduction rate combined with the long-term holding deduction is also increased by 10 percentage points to a maximum of 80%. Also, from January, you can choose the deduction method for the joint name of the couple. 1 Married couples who share housing can choose the desired deduction method when calculating the tax.

Under the joint name, each couple may receive a deduction of 600 million won each, up to a total of 1.2 billion won, or in the name of one of the couples. In this case, the elderly person deduction and long-term possession deduction can be applied after receiving a deduction of 900 million won per household and one homeowner. To apply the method of one household and one homeowner, an application must be made to the competent tax office from September 16 to 30.

Young-jin Ham, head of Jikbang’s Big Data Lab, said, “For a couple’s joint name, a joint name of up to 1.2 billion won is advantageous, and if it exceeds 1.2 billion won, the retention period is longer and the older the age, the more advantageous the deduction for one household is.”

▶Maximum tax rate increase=From January next year, the highest income tax rate will rise from 42% to 45%. Currently, if the tax base exceeds 500 million won, the maximum is 42%, but next year the maximum tax rate will rise to 45% if it exceeds 1 billion won.

The tax rate for multi-homed people who have owned houses for less than two years or who are in the target area for adjustment will increase from next June. Currently, 40% of houses held for less than one year are applied, and basic tax rates are applied to houses held for less than two years. However, from next June onwards, the tax rate for houses held for less than a year will increase by 30% to 70%. Houses held for less than two years are at a single rate of 60%.

The same goes for sales rights. Currently, a 50% tax rate is applied to pre-sale rights in the area subject to adjustment, regardless of the retention period. From next June, the 70% tax rate will be applied for those held for less than one year regardless of region, and 60% for other cases.

The median tax rate for the transfer tax on multi-homed people also rises by 10 percentage points. When a multi-homed person sells a house in an area subject to adjustment, 10% for two-homed owners and 20% for three-plus-home owners are overkill. From now on, it will increase to 20% and 30%, respectively.

▶ Tax-free calculation method, including the number of houses for saleFrom January, the conditions for exemption from transfer tax for one household and one homeowner will be different. Currently, you only need to own the house for at least two years. From January next year, the method of calculating the holding period will be slightly different. If you own more than 2 houses and then sell all but 1 house to become 1 house, calculating the retention period becomes difficult to tax the remaining 1 house.

When calculating the retention period, it should be calculated not from the date of acquisition of the relevant house, but from the date of becoming one house after selling all other houses. However, the exception is the one-house tax exemption for reasons such as temporary two-houses.

The special allowance for long-term holding of one household and one homeowner will be different. Currently, houses that have lived for more than 2 years can receive a special long-term deduction for 8% per year, and up to 80% for 10 years or more. From next year, in addition to the retention period, the period of residence is also considered. The existing 8% annual deduction rate is divided into 4% annual retention period and 4% annual residence period. For example, you must have held and lived for 10 years or more to receive a deduction of up to 80% of 40% each.

Sales rights are included in the number of houses from January. When a house is sold in an area subject to adjustment, a transfer tax is levied, including the number of houses for sale. However, this applies only to sales rights acquired after January 1, and does not apply to sales rights acquired.

▶Reduction of special income standards=From January next year, the income standard of special supply for newlyweds and the income standard of special supply for the first time in life will be eased. Currently, the income standard for newlyweds in private housing is 120% or less (130% of double-income) based on the average monthly income of urban workers. From next year, it will be reduced to 140% (double-income 160%) or less.

The income standard for the special supply of newlyweds in public housing is also expanding from 100% (double-income 120%) or less to 130% (double-income 140%) or less. For the first time in the life of public housing, the standard for special supply income is reduced from 100% or less to 130% or less, and for private housing from 130% to 160% or less.

▶Limited residence period for apartments with limited sales price=If you win an apartment with a pre-sale price limit applied from February 19th next year, you must live for at least two years after the apartment is completed. In public housing, depending on the sale price, you must directly move in and live for 3 to 5 years from the first possible move-in date. In private residential areas, you have to live for 2-3 years depending on the sale price.

If the person does not actually live during the period of duty of residence and cheats, imprisonment for not more than one year or a fine of not more than 10 million won will be imposed. However, if there are unavoidable circumstances, such as staying abroad, working, living, attending school, or residing in another area for the purpose of disease treatment during the mandatory residency period, you may be recognized as a resident after confirmation by the Korea Land and Housing Corporation (LH).

▶Enforcement of the monthly rent report system=If you sign a contract for rent or rent for a house from June next year, the contracted details must be jointly reported to the City/Gun/Gu office within 30 days by the parties to the lease. Contract party, rental period, deposit, rent, down payment, intermediate payment, balance payment date, etc. must be entered. At the same time as the report, a confirmation date is given.

Changes in rent, etc., must be reported within 30 days. If the contents of the lease are not reported or falsely reported, a fine of less than 1 million won will be imposed. Officetels and Gosiwon are not subject to reporting, not housing.

▶ Reinforcement of membership qualifications=The exact timing of implementation has not been decided yet, but at the reconstruction sites in the metropolitan area overheated speculation from next year, you must live for at least two years from the time of application for sales in the metropolitan area to apply for sales.

You do not have to stay in a row for a period of stay, but you only need to stay for 2 years or more. Members who do not meet the residency requirements are settled in cash at their assessed value (or market value). After the revision of the Urban and Residential Environment Improvement Act, it is applied from the first application for permission to establish a cooperative.

Reporter Choi Hyun-joo [email protected]