This research examines the property tax system on houses and determines methods to improve the system.
Property tax is imposed on land, buildings, and other assets, and the total fee is calculated by applying fixed rates to the value of assets, including houses. However, houses are reproducible goods. Property taxes imposed on reproducible goods by local governments has the characteristics of consumption tax on the appreciation of effective value, as the effective value of housing services created by housing is appreciated by public service provided by local governments.
In Korea, property tax is taxation on the fact of asset possession and has been operated as a means for asset redistribution. In spite of the high nominal progressive tax rate system, due to the low effective rate of tax resulting from the low assessment basis, even asset redistribution is not properly fulfilled, and many problems regarding the existing property tax system relating to houses have occurred.
First, housing taxes are not fulfilling their primary function of property tax due to the effective rate of tax. Second, the tax burden on apartments and houses is distorting their real value. Third, the assessment basis rate of buildings is so low compared to other tax items as to cause severe imbalance. Fourth, even though houses are bought and sold paired to land, property tax is imposed separately, causing administration costs related to double taxation.
In conclusion, problems regarding the property tax system can be divided into fairness problems of tax burdens on housing types, and functional weakening as a means to control excessive possession of houses. To resolve the functional weakening problem, the fairness problem should be resolved. Property tax is one of the taxes for which it is important to improve efficiency and fairness. One of the reasons for taxation by the government is to increase efficiency and fairness. Property taxes on houses should be considered as a personal duty, rather than a financial obligation, so it should be imposed only as necessary, and pursue efficiency and fairness at the same time with the progressive tax rate system.
주택재산세제의 개선방안(Ways to improve house property tax system)
서울 : 한국개발연구원
|Series Title; No||정책연구시리즈 / 93-23|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Financial Policy|
|Holding||KDI; KDI School|