Owners of ultra-pricey single homes with a tax base exceeding 2 billion won received the largest comprehensive real estate tax (jongbuse) reductions in four years last year through holding-period and elderly deductions, according to data. With the current system confirmed to grant larger tax cuts on more expensive homes, the government is preparing to reform the tax code in a direction that increases the holding-tax burden on ultra-pricey homes.
An analysis of National Tax Service statistics on the 26th showed that individual comprehensive real estate tax deductions applied to homes with a tax base exceeding 2 billion won totaled 46.1 billion won for last year. That is up 27.9 billion won, or 153.2%, from 18.2 billion won the previous year. Both the increase and the growth rate were the largest since 2021, and the scale of tax deductions also marked a four-year high.
Comprehensive real estate tax deductions apply to single-home owners in a single household who have held the property for five years or more, or who are aged 60 or older. Owners can receive deductions of up to 50% based on holding period and up to 40% based on age, and combining the two deductions can reduce the tax burden by up to 80%. Whether the owner actually resides in the home is not among the deduction requirements.
A tax base of 2 billion won corresponds to a market price of about 6.6 billion won for an apartment, applying the current fair market value ratio of 60% and the assessed price realization rate. For a detached house, it is estimated at around 8.5 billion won. The expansion of eligible recipients is attributed to rising prices of ultra-pricey homes, centered on Seoul, in recent years.
Last year, the total number of comprehensive real estate tax subjects was 538,439, combining individuals and corporations. Among them, those with a tax base exceeding 2 billion won numbered 8,399, accounting for just 1.6% of the total. However, some of these who met the single-home requirement took 46.1 billion won, or 22.2%, of the total tax deductions of about 207.1 billion won. In particular, 87.9% of all housing comprehensive real estate tax deductions were concentrated in homes located in Seoul. The analysis indicates that elderly owners who held ultra-pricey apartments in the Gangnam area for a long period received substantial tax reduction benefits.
The government believes this structure has fueled the preference for owning a single expensive home, the so-called "smart single home," and is pushing to reform the comprehensive real estate tax. It is reported that the government is also reviewing measures to increase the holding tax on ultra-pricey single homes above the current level while reducing or eliminating deductions based on holding period.
