The ‘vertical tax discrimination’ under the joint name of a single house couple will disappear as of next year … Interim agreement to extend deductions (total)

Entry 2020.11.30 17:17 | Revision 2020.11.30 17:24

Tax Subcommittee
A house in the joint name of the couple, agreed with the tax credit code
Concerns about fiscal resistance movement worsen public confidence in real estate
Starting next year, the tax burden will be reduced by up to 80%.

Starting next year, it is expected that the elderly and long-term holders can receive tax deductions for the elderly and long-term holders when a single house in the common name of the couple pays the comprehensive real estate tax (tax to the deposit). According to an official of the Planning and Finance Commission of the National Assembly on the 30th, the Tax Subcommittee agreed on the same day to adopt a plan to expand the tax deduction for the elderly and long-term holdings as an alternative to government between the amendments. to the tax law initiated by deputy Yoon Hee-sook, the power of the people.

Under current tax law, only one owner in a home is entitled to a tax credit. The tax authorities have interpreted that “it is not a house that a couple owns 0.5 homes each”. The government has expressed its position that it cannot grant deduction benefits to co-claimants for equity reasons. Under current law, if a couple owns a home together, a total of 1.2 billion won each is deducted from the home’s published price when calculating the tax base.

However, this logic generated criticism because it reversed the trend of expanding the scope of recognition of women’s property rights. It has also been argued that the incentive to maintain long-term apartments with public disclosure of more than 1.2 billion won will disappear. Rising real estate prices in the Seoul metropolitan area and publicly announced price increases increased the number of high-priced homes with more than 1.2 billion won, and the elderly couples who owned them under the common name they grew in discontent.

On November 2, Representative Hee-sook Yoon proposed an amendment to tax deductions for seniors and long-term holdings to expand tax credits for senior and long-term residents. The ruling and opposition parties agreed to only apply the senior tax credit and long-term possession of the law initiated by Representative Yun to the jointly named family unit.

If the National Assembly passes the revised bill, the final amount of taxes that a single-family home owner must pay next year could be reduced by as much as 80%. This year, the tax deduction rate for people aged 60 years or older was 10-30% depending on age, and the long-term withholding deduction rate for 5 years or more was applied from 20-50% depending on the retention period. The combined deduction limit for the two deductions will increase from 70% this year to 80% next.

Until this morning, the government was known to be negative about the amendment. A People’s Power official said: “It seems that the government has only now accepted that the deduction for elders and long-term possession be given to a single owner, which is reverse discrimination and goes against the trend of the time. .

However, the problem is that increasing benefits for the joint nominee may increase the dissatisfaction of the single nominee. At first, Assemblyman Yoon included in the bill that the public announcement would raise the tax standard for a single person from the current 900 million won (one house and one house) to 1.2 billion won, but it was not approved during the agreement between the two parties.

As home prices in the Seoul metropolitan area have risen sharply, the number of taxpayers has increased by more than 100,000, from 590,000 to more than 700,000 in one year. Compared to 2016, before the inauguration of the Moon Jae-in administration, the number of people increased by almost 400,000. A people power official said: “It may have been a concern that there is a fiscal resistance movement focused on retirees in some parts of Seoul due to worsening public sentiment in real estate.” “It will not be easy”.