The number of cases in which the comprehensive real estate tax burden skyrocketed due to the sudden inheritance of the house due to the death of the parents will be reduced in the future.
The Ministry of Strategy and Finance announced today (6th) the revision of the Enforcement Decree following the revision of the tax law that contains such content.
The revision of the Enforcement Decree of the Tax Act at the beginning of the year is a procedure to change the Enforcement Decree, which is a sub-decree following the revision of the Tax Act last year.
The government took the opportunity to revise this enforcement ordinance and proposed a supplementary plan to prevent cases where the tax burden on multi-family households increases due to the unavoidable ownership of the house.
First of all, when applying the property tax rate on inherited housing, in the case of housing located in the metropolitan area, special self-governing city, or metropolitan city, it has been decided to exclude from the number of houses for two years (three years for other regions) from the date of commencement of inheritance (the date of death).
Existing provisions that exclude the number of houses from calculating the number of houses only when the inherited equity ratio is 20% and the disclosure is less than 300 million won has been abolished and expanded to include all houses.
Subtracting from the number of houses has the effect of significantly lowering the applicable estate tax rate.
The current property tax rate for single-family homeowners is 0.6 to 3.0%, while the tax rate for two or three or more multi-households in the area subject to adjustment is 1.2 to 6.0%.
For example, the tax rate for single-family homeowners with 1.2 to 5 billion won based on the tax table was 1.6%, but for multi-family dwellings, the tax rate rose to 3.6% even if they had the same price.
Instead of the heavy tax rate for multi-family homeowners, the lower tax rate applied to single-homeowners will be applied, reducing the tax burden.
However, if two years have elapsed from the date of commencement of inheritance, it is highly likely that the number of houses will be applied and the heavy estate tax rate will be applied.
In the end, it means that I will give you two years to sell.
The method of adding the inherited house to the tax base is maintained.
If a person with a house valued at 1 billion won inherits a house worth 600 million won, he or she will have to pay the property tax equivalent to the house valued at 1.6 billion won.
The effective period is from the portion of the tax obligation established after the promulgation of the enforcement ordinance in the middle of next month.
Even if inheritance started before the enforcement ordinance came into force, the new rules will be applied when taxing the property tax if it is within two years (three years for local areas) from the date of commencement of inheritance as of the tax base date of this year (June 1).
In the case of inheritance housing located in the metropolitan area or special self-governing city, the new regulations may apply if the inheritance start date is after June 2020.
For example, if you received an inheritance on March 1, 2021, as of June 1, 2022, it is within two years from the start date of inheritance, so it is excluded from the number of houses according to the new regulations.
The government is planning to publish the amendment to the tax law enforcement ordinance between the 9th and 15th of next month after going through a notice of legislation and a cabinet meeting.