The ruling party confirms the parliamentary agreement… Applicants open every year in June
As of last year, the announced price was 11 billion… about 2 billion
Official price = government set… Targets vary by policy
Violation of the tax law principle under the Constitution… “Unconstitutional possession”
Ministry of Finance “The difficult part to establish a contact point, we are working hard”
|[서울=뉴시스] Reporter Choi Dong-jun = Kim Jin-pyo, chairman of the Democratic Party’s Real Estate Special Committee, listens to the remarks of floor leader Yun Ho-jung while attending the general assembly of lawmakers held at the National Assembly in Yeongdeungpo-gu, Seoul on the afternoon of the 18th. (joint photo) 2021.06.18. [email protected]|
[세종=뉴시스] Reporter Jinwook Kim = The new housing comprehensive real estate tax imposition standard (top 2%) recently confirmed by the Democratic Party of Korea has been engulfed in controversy. Various criticisms followed, from the point of “possibility of being unconstitutional” to “high tax resistance” and “a waste of administrative power”. There are also observations that it only divides the people into ‘those who own the top 2% of houses’ and ‘those who don’t’, and that it goes against the purpose of taxation.
According to the politicians on the 21st, the Democratic Party held a general assembly of lawmakers on the 18th and decided to impose a tax on the top 2% of the listed price for one house per household. As of this year, the disclosure price is between 1.11 billion won and 1.12 billion won. Currently, the property tax is levied on houses with a publicly announced price of 900 million won or more based on one house per household, and this standard has been raised by 200 million won.
The problem is that this public price is set by the government. The Ministry of Land, Infrastructure and Transport determines and publicizes it in March every year, and it is finalized in April after collecting opinions from homeowners and local governments. In particular, the government is pushing for a ‘realization plan’ to raise the publicly announced price of apartment and other apartments to 90% of the market price by 2030. This means that the government can adjust the target of the levy tax.
It is analyzed that changing the subject of taxation according to the government’s policy is contrary to the constitutional principle of tax law. Article 59 of the Constitution stipulates that ‘tax items and tax rates are determined by law’. Although the taxable subject, tax standard, and tax rate should be specified by law, the Ministry of Strategy and Finance and the Ministry of Land, Infrastructure and Transport can touch the ‘top 2%’, which is unconstitutional.
Accordingly, there is a possibility that the number of unconstitutional lawsuits such as constitutional complaints will be reduced. The government plans to set the top 2% price standard based on the announced price set in April and announce it before the tax base date (June 1), which means that ‘who will become a taxpayer must receive a bill to know’. It is expected that the resistance of taxpayers who will abruptly pay the final tax on the ‘blinking’ taxation will be fierce.
|[서울=뉴시스] Reporter Byung-Moon Kim = An apartment complex in downtown Seoul as seen from Namsan Seoul Tower in Jung-gu, Seoul. 2021.06.13. [email protected] This photo is not directly related to the content of the article.|
The rate of increase in the announced price varies by region, and depending on the fluctuations in house prices, there may be a number of cases where they were excluded from the subject of property tax this year and then included next year. It is pointed out that administrative power is wasted compared to the previous one due to the wide range of changes in the subject of the estate tax.
An official from the business community, who requested anonymity, said, “One of the important taxation purposes of the property tax is to stabilize the real estate market, and if you set the standard as the ‘top 2%’, you have to pay this tax even if the house price goes down.” “It goes against the purpose. The ‘top 2% plan’ will end up only producing side effects that divide the people’s side, and it will be a case in which the original purpose has not been achieved.”
The opposition immediately criticized it. Hwang Bo Seung-hee, senior spokesperson for the People’s Power, said in a comment on the 21st, “The result of the messing around is the top 2% estate tax that I have never heard of.” It’s just a split taxation. What effect does the top 2% plan have on market stability?”
However, the Democratic Party, which started the real estate tax reform with the awareness of “losing 1 million votes at this rate,” is likely to carry out this proposal. Kim Jin-pyo, chairman of the Democratic Party’s real estate special committee, retorted on KBS radio on the 21st, saying, “Under the current system, the price fluctuates every year, so the subject of taxation fluctuates.” “If you tax the top 2%, the predictability increases.”
The Ministry of Strategy and Finance said it was in contact with the ruling party regarding the top 2% proposal. At a regular briefing on the 21st, spokesperson Kim Dong-il of the Ministry of Strategy and Finance said, “It was difficult to establish a point of contact with the original idea of the Ministry of Finance, but I know that the (top 2%) plan was decided by the (Democratic Party) National Assembly and discussions are underway.” “I’m trying to get in touch with the Democrats,” he said.
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