There are a lot of articles about the’Volunteer Tax Bomb’. The final tax invoice is issued around the end of November. It is also on June 1 that the subject of the taxation tax will be confirmed.
Even if you own a home now, if you sell it before June 1, you are not subject to the tax. It is not determined who will pay the census tax, but the article that the number of people subject to the census tax increased by 210,000 households is different from the facts.
The rationale for the’Vertical Tax Bomb’ is an increase in the official price and an increase in the tax rate. In the case of Seoul, the publicly announced price rose by an average of 19.91% this year. The increase in public prices is the result of soaring home prices, so households that pay more tax on their property have increased their property by several tens of times.
There is also an article stating that the increase in public prices has severely increased the tax burden for multi-homeowners. This is an article written without knowing any reality. This is because the government has provided a hole for multi-homed people to get out of without paying one won.
According to the analysis of the Ministry of Land, Infrastructure and Transport, Gangnam-gu apartments (114㎡) increase the tax in the amount of 5.56 million won for one house owner. Even if the property tax is added, the increase in the ownership tax is 7.44 million won. The official price of the apartment rose by 340 million won last year alone. The property increased by 46 times the increase in the holding tax even when calculated based on the publicly announced price.
Most of the 1.6 million rental housing units are ‘0 won in tax.
In theory, the tax burden increases sharply from the second homeowner. The amount of deductions will decrease from 900 million won to 600 million won based on the publicly announced price, and the tax rate will rise significantly.
For example, two houses who own an apartment in Gwanak-gu with a public announcement of 590 million won and an apartment in Gangnam-gu with 1.55 billion won increase their ownership tax by a whopping 2363 million won. Articles are reported that the tax burden is so heavy that it is possible to sell a single house.
However, this tax calculation is literally’theoretically’, but the reality is completely different. If the second homeowner registered an apartment in Gangnam-gu as a rental housing when the publicly announced price was less than 600 million won, the situation would be dramatically reversed. No matter how much the public announcement price rises, the tax is not paid by 1 won.
Most of the 1.6 million rental homes registered nationwide are enjoying the preferential treatment of’zero tax on tax.’
Article 3 of the Enforcement Decree of the Securities Tax Act (Rental Housing Excluded by Total) stipulates the subject of tax exemption from the taxation tax, including rental housing registered by a rental business entity.
The term’exclusion in total’ is a legal term that means non-taxation. It literally means that when calculating the tax, the housing is not added up, but is calculated separately. If the publicly announced price of each house is less than 600 million won, the tax is exempted. It is also based on the registration date of rental housing, so even if the price of the house surges after registration, the tax is 0 won. There is no special preference like this.
In the case of Seoul, where the house price is expensive, it is estimated that a significant number of second-homeowners are registered as rental businesses and are enjoying the preferential treatment of’zero taxation tax’. The Ministry of Land, Infrastructure and Transport is refusing to disclose the data on how many second-home residents receive such tremendous tax benefits.
Most of Seoul’s 3 or more homeowners must have registered as rental companies
It is estimated that most of the three or more homeowners have registered as rental businesses. If you own three or more houses in Seoul, the housing price will exceed 2 billion won, so the tax burden will reach tens of millions of won.
If you register as a rental business, you can enjoy the privilege of “zero cadastral tax”, but no one will pay tens of millions of won valuation tax. Anyone could register for rental housing if the public announcement was less than 600 million won and the exclusive area of 85 m2 or less, so rental housing registration in 2017 and 2018 was inconvenient.
According to the data released by a member of the National Assembly a few months ago from the Ministry of Land, Infrastructure and Transport, all three of the nation’s most registered rental houses are residents of Seoul. The first place was Seocho-gu residents who registered 753 rental housing units, the second place was Gangseo-gu residents who registered 591 houses, and the third place was Mapo-gu residents who registered 586 houses.
Although the Ministry of Land, Infrastructure and Transport has not disclosed details of the houses, it is estimated that a significant number of houses are located in Seoul and the metropolitan area because they are residents of Seoul. Even if the price per unit is assumed to be 400 million won, which is lower than the average housing price in Seoul, the total housing price of these three people is 301.2 billion won, 236.4 billion won, and 2344 billion won, respectively.
In the case of normal taxation, the tax amount owed to these three people exceeds 10 billion won each. However, it is estimated that these three will pay less than 1 won of tax due to the provisions of the ‘aggregated exclusion’ of Article 3 of the Enforcement Decree of the Securities Tax Act.
If Article 3 of the above Enforcement Decree is abolished and the tax is normally taxed, a significant number of the 1930 houses owned by these three will be sold. In addition to this, a significant number of 500,000 rental housing units registered in Seoul will come out for sale, so the house price will drop sharply.
‘Citizens’ Action to Normalize House Prices’, which represents the voice of the homeless people, demanded the Democratic Party along with the Blue House to abolish such preferential tax treatment through press conferences in November and December of last year and in February of this year. However, the Blue House and the ruling party do not seem to have any intention to abolish this tax preferential treatment.
On February 17, the enforcement ordinance of the Final Tax Act was revised to further expand tax preferential treatment for rental businesses
On February 17, the State Council revised Article 3 of this enforcement decree, which, surprisingly, did not abolish the tax preferential treatment, but rather expanded it. The target of rental houses registered by construction companies has been increased from 600 million won to 900 million won based on the publicly announced price, and the exclusive area standard has been greatly expanded from 85 square meters to 149 square meters. Construction companies set the sale price too high, and even if unsold was incurred, it was registered as a rental housing, allowing them to enjoy tremendous tax benefits such as’zero tax on tax’ and ‘100% reduction in transfer tax’. It is obvious that construction companies will increase sales prices in the future.
You can read the true intentions of the Blue House and the government, which are devoted solely to the interests of housekeepers and construction companies, without paying attention to the extreme pain that homeless people are suffering from.
The media’s “Voluntary Tax Bomb” cannot be called a “bomb” as a part of the increase in wealth is paid more by tax. Even that, there is a big hole through which more than two houses can get out.
The law to allow this hole is one of the evils that destroyed the fairness of taxation and increased the price of the house. Abolishing this tax preference is the way to revive the fairness of our society and reduce the suffering of homeless people.