More than 200 tax law queries submitted to the National Tax Service have gone unanswered for over a year, as South Korea's property tax rules grow increasingly complex. Queries on property-related tax laws — including capital gains tax, the comprehensive real estate holding tax and inheritance and gift taxes — have already topped 2,700 this year, approaching the total for all of last year. Analysts say the increasingly complicated property tax system is fueling anxiety among taxpayers while adding to the administrative burden on tax authorities.
According to data submitted by the National Tax Service to Rep. Lee Jong-wook of the People Power Party, a member of the National Assembly's Finance and Economy Committee, on the 14th, queries seeking interpretation of tax law on three property-related tax items — capital gains tax, the comprehensive real estate holding tax, and inheritance and gift taxes — totaled 2,726 from January through July this year. That is 91.3% of the 2,987 queries received for all of last year and already exceeds the 2,673 received throughout 2024.
The National Tax Service operates a tax law interpretation query system that allows taxpayers to request official interpretations when they find it difficult to determine how tax law applies to their business activities or daily lives. Taxpayers submit queries in writing or through the Hometax portal, and the agency reviews relevant statutes before responding.
By tax item, queries this year again clustered around capital gains tax. Through July, capital gains tax interpretation queries numbered 2,262, accounting for 83% of all property-related queries. That is 95.6% of the 2,365 capital gains tax queries filed for all of last year. With five months still remaining, the figure is likely to far exceed last year's level if the current pace continues.
Queries related to the comprehensive real estate holding tax totaled 87 through July this year, or 79.1% of the 110 filed for all of last year. That already surpasses the 83 received throughout 2024. Because the data does not reflect inquiries made after the government unveiled its overhaul of the holding tax in August, observers expect queries from taxpayers seeking to confirm their tax burden and whether the rules apply to them to increase further in the second half.
A series of sweeping changes to property taxes is cited as the reason behind the rise in queries. The government resumed heavier capital gains taxation on multiple-home owners from May 10 this year, then proposed in its August tax reform package to shift the long-term holding deduction toward an owner-occupancy basis and introduce a cap on the deduction. Lee said that repeated shifts in policy direction during this process heightened uncertainty for taxpayers and led to the surge in queries.
As queries mount, the number the National Tax Service has failed to answer is also rising. Unanswered interpretation queries across the three property-related tax items climbed from 1,062 in 2024 to 1,194 last year, then swelled to 1,578 by the end of July this year.
Cases left unanswered for extended periods have risen sharply. Queries still awaiting a response 365 days after submission rose 2.3-fold, from 100 last year to 230 by July this year. Unanswered queries past the 90-day and 180-day marks numbered 369 and 372, respectively. The average processing time was 114.5 days, well beyond three months, while the longest case took 766 days.
Property transactions involve large amounts of tax, and whether tax is owed and how much varies widely depending on the timing of the sale, how long the property was held and occupied, and the number of homes owned. Concerns are growing that the longer interpretations are delayed, the harder it becomes for taxpayers to make major decisions such as selling or gifting a home.
Kim Woo-chul, head of the Korean Association of Public Finance, said the latest tax reform package included transitional provisions to soften the impact but ended up making the rules change every year for two to three years. "Even tax accountants find it hard to tell which law applies at which point, so it could backfire," he said. "Property taxes need to be run in a simpler and more stable way."
