Korea mulls higher property taxes to curb speculation
South Korea may raise property taxes as speculation and prices climb despite government efforts to cool the market. President Lee Jae Myung stated that all policy measures must be used to stop unproductive speculation ahead of the June local elections. Finance Minister Koo Yun-cheol noted that low ownership taxes and high capital gains levies have frozen the housing market. A home valued at 5 billion won would face annual taxes of 50 million won under a 1 percent rate similar to American standards.
The current system applies property tax to 60 percent of the assessed value with rates from 0.1 to 0.4 percent. An additional national tax targets expensive holdings with rates up to 5 percent. Critics say this structure benefits wealthy homeowners while blocking sales. However, the ruling Democratic Party of Korea plans to announce housing supply initiatives by December and stated that no new tax changes are being considered before the election.
