The National Tax Service said it would calculate in advance and provide guidance on the more favorable comprehensive real estate tax method for married couples who jointly own a single home.
Joint ownership does not always make the same method more favorable, and deductions and tax credits vary depending on whether the special provision applies.
Those eligible for this year’s guidance should review the September application and cancellation period together with the National Tax Service’s estimated tax amount.
3-Line Summary
1. Married couples who jointly own a single home choose their comprehensive real estate tax method
2. The special provision provides a 12-billion-won deduction and a maximum 80% tax credit
3. The National Tax Service’s guidance is reference material for deciding whether to apply
Applying the Special Provision Provides a 12-billion-won Deduction to One Spouse
According to a report by the Kyunghyang Shinmun, married couples who jointly own a single home can calculate their comprehensive real estate tax in the same way as single-name single-home owners by applying for the special provision for single-home owners with jointly held title. Under this method, one spouse is designated as the taxpayer and receives the basic deduction of 12 billion won.
Under this special provision, the taxpayer may also receive a tax credit based on age and the period of home ownership, with a maximum credit rate of 80%. However, this does not mean the special provision benefits every married couple with jointly held title. The result may vary depending on each couple’s circumstances, including age, ownership period, and home price.
Without applying the special provision, each spouse receives a basic deduction of 9 billion won, for a combined total of 18 billion won. Instead, they cannot receive a tax credit based on age or ownership period. After the basic deduction increased from 6 billion won to 9 billion won per person, cases have also emerged in which it is more favorable not to choose the special provision.
The National Tax Service Said It Would Individually Notify Taxpayers of the More Favorable Option
National Tax Service Commissioner Lim Kwang-hyun said on September 13 that the agency would individually notify married couples who jointly own a single home of their most favorable estimated tax amount by mobile message or mail. The targets identified by the National Tax Service include approximately 5,700 people for whom applying for the special provision is favorable and approximately 2,900 people for whom canceling the existing special-provision application is favorable.
This is the National Tax Service’s stated analysis and guidance plan. The method actually applied requires the taxpayer to submit an application or cancel an existing application, and the individual tax amount varies according to the home and the owner’s circumstances.
The National Tax Service also said it plans to analyze jointly titled owners who previously paid more because they were unable to use the special provision, provide individual guidance, and proceed with the refund process. This is not an announcement that the refund recipients and amounts have been finalized for all jointly titled owners.
Applications and Cancellations Are Available from September 16 Through 30
Married couples who jointly own a single home may apply for the special provision or cancel an existing application from September 16 through 30. The Kyunghyang Shinmun reported that decisions made during this period will be reflected in the regular November billing.
Even if they do not make a selection in September, taxpayers may file during the regular comprehensive real estate tax filing period in December using the more favorable method. However, it is difficult to decide based on a single criterion, such as “the special provision is better because the home is jointly owned” or “the special provision should be canceled because the basic deduction is larger.”
The key point in this guidance about the system is not only the size of the deduction, but also the estimated tax amount after including the age- and ownership-period-based tax credits available under the special provision. Those who receive individual guidance should review the calculation results for both methods together with their application status.
References
Tags #ComprehensiveRealEstateTax #PropertyTax #MarriedCoupleJointOwnership #JointlyOwnedSingleHome #ComprehensiveRealEstateTaxSpecialProvision #PropertyTaxApplication #PropertyTaxCancellation #PropertyTaxRefund #NationalTaxService #HousingTaxes #SingleHomeOwner #TaxCredit