ID :
20742
Tue, 09/23/2008 - 14:19
Auther :
Shortlink :
http://m.oananews.org//node/20742
The shortlink copeid
S. Korea to ease taxes on high-priced houses
SEOUL, Sept. 23 (Yonhap) -- South Korea said Tuesday that it will readjust rules regarding a controversial real-estate holding tax system in an effort to boost the domestic construction sector and resuscitate the nation's overall economy.
The Finance Ministry said that it will raise the minimum tax base for homes subject to the comprehensive real-estate hold tax from the current 600 million won (US$521,740) to 900 million won from next year.
Tax rates will also be revised downward from the current 1-3 percent to 0.5-1 percent. An additional cut of 10-30 percent will be given to people aged over 60 on condition that they own a single house, the ministry said.
At the end of last year, households subject to the surtax totaled 379,000 but the tax readjustment will likely halve that number.
The ownership tax, which levies taxes on high-priced real estate holdings by a household, was first introduced in 2005, causing a backlash from conservatives, who allege the tax scheme is a form of "double" taxation that penalizes the rich only.
The latest move reflects the Lee Myung-bak government's economic policy objective to boost consumer spending by increasing disposable income, while at the same time breathing new life into the housing and construction market, which accounts for about 18 percent of the country's gross domestic product.
Critics, however, say that the move is yet another example that the conservative government is crafting measures only in the interest of a small group of rich people.
Earlier this month, the ministry unveiled a wide-range of tax reforms including income and corporate tax cuts, a move that it expects will save people an estimated 11.7 trillion won in tax payments by the end of 2009.
Some point out the far-reaching tax reforms are designed mostly to benefit the rich, raising concerns they could widen the gap between the haves and the have-nots, as well as put a damp on economic growth in the process.
The Finance Ministry said that it will raise the minimum tax base for homes subject to the comprehensive real-estate hold tax from the current 600 million won (US$521,740) to 900 million won from next year.
Tax rates will also be revised downward from the current 1-3 percent to 0.5-1 percent. An additional cut of 10-30 percent will be given to people aged over 60 on condition that they own a single house, the ministry said.
At the end of last year, households subject to the surtax totaled 379,000 but the tax readjustment will likely halve that number.
The ownership tax, which levies taxes on high-priced real estate holdings by a household, was first introduced in 2005, causing a backlash from conservatives, who allege the tax scheme is a form of "double" taxation that penalizes the rich only.
The latest move reflects the Lee Myung-bak government's economic policy objective to boost consumer spending by increasing disposable income, while at the same time breathing new life into the housing and construction market, which accounts for about 18 percent of the country's gross domestic product.
Critics, however, say that the move is yet another example that the conservative government is crafting measures only in the interest of a small group of rich people.
Earlier this month, the ministry unveiled a wide-range of tax reforms including income and corporate tax cuts, a move that it expects will save people an estimated 11.7 trillion won in tax payments by the end of 2009.
Some point out the far-reaching tax reforms are designed mostly to benefit the rich, raising concerns they could widen the gap between the haves and the have-nots, as well as put a damp on economic growth in the process.
