Seoul (South Korea), March 23: South Korea said Wednesday it plans to ease tax burdens on owners of a single home amid growing public discontent about the government's housing policy amid skyrocketing home prices in recent years.
The measures -- which are set to be announced at 11 a.m. -- are meant to prevent the owners of one home from additionally shouldering the burden of paying real estate-related taxes.
The government plans to let the owners of one home pay similar amounts of property-holding taxes to those of last year on a temporary basis, Finance Minister Hong Nam-ki said at a meeting on the housing policy.
One-home owners aged 60 and older will also be allowed to postpone the payment of the so-called comprehensive real estate taxes, Hong added.
Public complaints about the Moon Jae-in administration's real estate policy mounted as skyrocketing home prices drove up tax burdens on homeowners and raised costs for people who seek to rent or buy homes.
The government has unveiled a set of measures to cool the red-hot real estate market, including tax hikes and tighter lending rules. But such steps largely have lead to a short-term letup in price gains as excessive demand for homebuying has not easily subsided.
The latest measures come as the country's state-assessed price value for homes has sharply increased in tandem with high-flying home prices.
In South Korea, the government taxes land and homes based on its annual assessment value instead of the actual market value.
The average government-assessed housing prices rose 19.05 percent across the nation last year, the sharpest on-year gain in 14 years, as the government seeks to continue to hike them in a bid to match them close to their market value.
The government said last year it plans to raise state-evaluated prices for all types of real estate, including apartments and land, to up to 90 percent of their market prices in the next 10-15 years.
In 2021, the central and provincial governments collected 10.9 trillion won (US$8.98 billion) in property-related taxes, more than doubling from 3.93 trillion won in 2016, a year before President Moon took office in May 2017, according to a lawmaker from the main opposition party.
During the election campaign, President-elect Yoon Suk-yeol promised to ease the comprehensive real estate tax for owners of one home and overhaul other property-related taxes.
He also pledged to supply 2.5 million new homes during his term and ease rules on reconstruction and redevelopment.