OECD recommends strengthening property holding taxes and lowering transaction taxes for South Korea
OECD recommends reforming the property tax system, shifting toward stronger holding taxes and lower transaction taxes to increase mobility Check out the tax policy direction that reduces transaction friction and boosts market circulation
The Organisation for Economic Cooperation and Development (OECD) has recommended that South Korea revise its real estate tax system to raise holding taxes and lower transaction taxes. In its Korea Economic Report released on the 2nd, the OECD explained that such an adjustment could increase residential mobility and reduce transaction frictions in the property market.
The report said that easing transaction burdens could help improve the circulation of listings. In the long term, it also proposed a plan to tax based on market prices rather than officially assessed prices, as well as a plan to apply higher tax rates to assets with low utility, such as vacant properties or vacation homes.
The OECD also pointed out that taxes on capital gains, such as stocks, need to be revised as well. It also raised concerns that in the inheritance tax system, the family business inheritance deduction could be used as a means of tax avoidance, and mentioned the need for structural reform and adjustment in education finance, pensions, and monetary policy.