Comprehensive Real Estate Tax Explained: Calculation and Strategies
2025-01-14
1. What is Comprehensive Real Estate Tax?
Comprehensive Real Estate Tax is a national tax imposed on those who own real estate above a certain amount. It is levied separately from property tax and aims to stabilize real estate prices by increasing the burden of property ownership. It is divided into housing and land.
2. Taxation Criteria
Housing: Taxed when total official price exceeds 600M KRW (1.2B KRW for one-house households). Land: Taxed when comprehensive land exceeds 500M KRW, separately aggregated land exceeds 8B KRW. Tax base date is June 1 each year, calculated based on properties held on this date.
3. Tax Rates and Calculation
One house: 0.6-3.0% (by tax base bracket). Two houses: 1.2-6.0%. Three+ houses: 2.0-6.0%. Adjustment target area 2+ houses: Heavy taxation applied. Tax base = (Total official price - Deduction) ร Fair market value ratio. Tax = Tax base ร Rate - Progressive deduction.
4. Deductions and Exemptions
One-house household: Up to 80% senior/long-term holding deduction (age + holding period combined). Temporary 2-house: Treated as 1 house when meeting requirements. Inherited house: Excluded from house count for 5 years from inheritance. Regional low-price house: One house โค300M KRW excluded from count.
5. Tax-Saving Strategies
โ Maintain one-house status for 1.2B KRW deduction. โก Maximize senior/long-term holding deduction. โข Consider selling before official price base date (6.1). โฃ Distribute ownership between spouses. โค Consider corporate ownership (comprehensively consider corporate tax). โฅ Meet temporary 2-house requirements.
6. Filing and Payment
Must file and pay between December 1-15 each year. National Tax Service sends payment notice, so payment possible without separate filing, but direct filing may be required to receive deductions/exemptions. Installment payment available (when tax exceeds 2.5M KRW).