The government collected more than 68 trillion won in taxes on assets last year. Although the property market bubble has been one of the biggest reasons since the outbreak of COVID-19, it’s been found that the effect of the real estate policies, such as punitive taxation on homeowners with multiple properties, was also great. In other words, the “explosion of taxes” has become a reality.
According to the Ministry of Economy and Finance on the 13th, asset-related national tax revenues reached 68.1 trillion won last year. It is the result of 36.7 trillion won in capital gains tax, 15 trillion won in inheritance and gift tax, 6.1 trillion won in comprehensive real estate tax, and 10.3 trillion won in securities transactional tax.
Considering that in 2020 the transfer tax was 23.7 trillion won, the inheritance and gift tax was 10.4 trillion won, comprehensive real estate tax was 3.6 trillion won, and securities transactional tax was 8.8 trillion won, the asset tax has increased by 46.8 percent. It’s important to note that it increased by 2.4 times compared to the 28.1 trillion won in asset tax in 2017, the first year of the Moon Jae-in administration since its inauguration.
The asset tax revenue has fluctuated from around 30 trillion won, including 33.5 trillion won in 2018 and 31.6 trillion won in 2019, but has soared in the past two years—46.4 trillion won in 2020 and 68.1 trillion won in 2021. The share of asset tax in total national tax revenues also doubled from 11 percent in 2017-2019 to 16.3 percent in 2020 and 19.8 percent in 2021.
Among asset taxes, the comprehensive real estate tax has increased the most. The total real estate tax, which was 1.7 trillion won in 2017, increased to 3.6 trillion won in 2020 and surged to 6.1 trillion won in 2021. Since the start of this administration, we’ve seen a 3.6-fold increase in tax revenues.
The transfer tax increased 2.4 times from 15.1 trillion won to 36.7 trillion won during the same period. The inheritance and gift taxes increased 2.2 times from 6.8 trillion won to 15 trillion won. The securities transactional tax rose 2.3 times from 4.5 trillion won to 10.3 trillion won.
Many view the sharp increase in asset taxes in 2020 and 2021 from the perspective of soaring asset prices created by the abundant liquidity after the outbreak of COVID-19. In particular, if asset prices rise, the target, which is the standard for imposing taxes, will also rise significantly, forcing them to pay more taxes, whether it be holding or transactional taxes. In the case of last year, the official price of apartments alone rose 19.05 percent.
The real estate policy, which imposed heavy ownership tax and transactional tax on homeowners with multiple properties and short-term traders, also contributed to the increase in tax revenue. Punitive taxation is intended to reduce speculative consumers, such as homeowners with multiple properties and short-term traders by using the means of taxes, but as a result, it is said that only the government has collected a large amount of taxes. In the same context, the inheritance and gift taxes doubled from 8.3 trillion won in 2019 to 15 trillion won in 2021 due to the phenomenon that homeowners with multiple properties increase their donations to avoid holding taxes.
Original article: https://www.jayupress.com/news/articleView.html?idxno=2387
