An analysis has found that residential property holding tax will exceed 10 trillion won this year if the fair market value ratio for the comprehensive real estate tax is raised from the current 60 percent to 80 percent. Amid expectations that the government will overhaul the holding tax to stabilize the real estate market, raising the fair market value ratio is being cited as a likely measure.
According to data that Rep. Lee Jong-wook of the People Power Party, a member of the National Assembly's Land, Infrastructure and Transport Committee, obtained by commissioning the National Assembly Budget Office, residential property holding tax (property tax plus comprehensive real estate tax) in 2026 is estimated at 8.6995 trillion won under the current 60 percent fair market value ratio, according to a report released on the 9th.
Raising the ratio to 80 percent would increase the tax to 10.0658 trillion won, a 15.7 percent rise from the current level, the analysis found. Applying 95 percent would raise the holding tax to 10.7726 trillion won, an increase of 23.8 percent from the current level.
The fair market value ratio is the rate applied to the officially assessed price to calculate the comprehensive real estate tax base. The fair market value ratio for the comprehensive real estate tax was raised to as high as 95 percent under the Moon Jae-in administration, then lowered to 60 percent after the Yoon Suk-yeol administration took office, and has been maintained at that level since.
The holding tax is the sum of the property tax and the comprehensive real estate tax. The Budget Office forecast this year's residential property tax at 7.2233 trillion won. It estimated that the comprehensive real estate tax would increase from 1.4763 trillion won at a 60 percent fair market value ratio to 2.8425 trillion won under 80 percent and 3.5494 trillion won under 95 percent.
By region, Seoul and Gyeonggi Province, where high-priced properties are concentrated, saw the largest increases in tax burden.
Seoul's residential property holding tax would increase from the current 4.5191 trillion won to 5.4721 trillion won, a 21.1 percent rise, if the fair market value ratio were raised to 80 percent. Applying 95 percent would raise it to 5.9595 trillion won, an increase of 31.9 percent, the analysis found.
Gyeonggi Province's tax would increase from 2.0377 trillion won to 2.258 trillion won under 80 percent and 2.3707 trillion won under 95 percent, rising 10.8 percent and 16.3 percent, respectively.
The burden per taxpayer is also expected to increase sharply. Based on the 455,331 people subject to the comprehensive real estate tax in 2024, the average residential comprehensive real estate tax per person is estimated to rise from the current 3.24 million won to 6.24 million won under an 80 percent fair market value ratio, a 1.9-fold increase, and to 7.8 million won under 95 percent, a 2.4-fold increase.
"Raising the holding tax increases the burden on genuine end-users and risks being passed on to tenants," Rep. Lee stressed. "Rather than suppressing real estate market instability with taxes, we must prepare supply measures and substantive market stabilization plans."
