Tax Revenues Surge After Run on Homes

Property acquisition tax revenue approached an estimated W10 trillion last year, a record high, according to the Ministry of Economy and Finance on Sunday (US$1=W1,105). A year earlier the total amounted to W7.65 trillion.

"Final figures have yet to be tallied, but they are expected to have increased 50 percent in Seoul and 30 to 40 percent in Gyeonggi Province," a government official said. "In other provinces they're estimated to have risen by around W2 trillion, a similar increase to the previous year."

In Seoul alone, people paid a record W3.7 trillion in property acquisition tax last year, up 55 percent.

The main reason is that home purchases soared last year on panic buying as Koreans borrowed heavily to buy apartments fearing a further increase in prices. Apartment sales in Seoul surged 35 percent.

Property acquisition taxes are calculated in proportion to the actual price of a home, and prices surged last year.

Koreans shoulder heavier property acquisition taxes than many other countries. As of 2018, the ratio of property acquisition taxes to GDP stood at two percent, which is four times the average of the G7 countries. It is 0.3 percent in Japan and 0.1 percent in the U.S.