ID :
30222
Fri, 11/14/2008 - 15:12
Auther :
Shortlink :
https://www.oananews.org//node/30222
The shortlink copeid
Real estate tax law to get facelift
By Shin Hae-in
SEOUL, Nov. 14 (Yonhap) -- Hard on the heels of a court ruling that effectively struck down a progressive tax law on high-end home owners, South Korea's conservative ruling party said Friday that it will promptly push for sweeping revisions.
The real estate tax, levied in addition to regular property taxes on high-value
homes, was first introduced in 2005 under the former Roh Moo-hyun administration
and was intended as a means to help redistribute the nation's wealth.
Ending two years of deliberation, the Constitutional Court declared Thursday that
the tax was unconstitutional as it was based on the total value of properties
owned by a household, rather than by individual owners. The formula was deemed by
the court as discriminatory against married couples as it violated the
Constitution's protection of marriage.
The verdict opens the way for the government to refund a significant portion of
the special tax and gives momentum to the Lee Myung-bak government's hopes of
revising or even scrapping the system entirely. Lee has long attempted to revamp
the tax, seeing it as a punitive measure against the wealthy that holds back the
country's economic revitalization.
While the ruling Grand National Party (GNP) has welcomed the court's decision and
is moving swiftly to fix the law, opposition parties are accusing the top
tribunal of playing puppet to the conservative government and the country's
privileged few. A revision appears inevitable, however, as the GNP controls an
absolute majority of 172 seats in the 299-member unicameral house.
"We fully respect the court's decision and plan to make haste in revising the law
to make it conform with the verdict," said the ruling party's chief policymaker
Yim Tae-hee. "Wrongfully collected money will be given back as soon as possible
and we will see to it that a revision of the real estate tax will not affect
overall tax revenue."
The party will consult the government in rewriting the plan, especially as
changes need to be made on a pending reform bill, Yim added. The revision calls
for raising the tax threshold to houses priced at 900 million won (US$780,000)
from the current 600 million won, which the Lee government says will ease the
burden on expensive homeowners.
Following the court ruling and the government-led revision, only spouses owning
properties worth up to 1.8 billion, or 900 million won each, will be subject to
the tax. That tax bar is extremely high, however, even for government and ruling
party standards.
Of the 379,000 people who paid the real estate tax last year, only 147,000, or 38
percent, owned just one residence, while 61,000 owned more than five, according
to government data.
Calling the court ruling a "bad verdict," chairman of the main opposition
Democratic Party said it will fight against any revision of the tax "using all
possible means."
"The court stood by the strong, instead of taking the side of 98 percent of the
Korean people," said party leader Chung Sye-kyun. "We will stand by the middle-
and lower-income people. There will be no changes in this necessary tax."
The main opposition accuses the Lee government of attempting to increase regular
property taxes to fill in for the lost tax revenue expected to come about as a
result of the tax revision.
The minority Democratic Labor Party, meanwhile, escalated allegations that
Finance Minister Kang Man-soo abused his power to influence the court's decision.
Kang had hinted that his ministry discussed the legality of the real estate tax
law during last week's parliamentary session. Kang later explained it was a
misunderstanding caused by a "verbal lapse," but the parliament launched an
independent probe on the allegations this week.
"No one was surprised by the court's decision. It was exactly the same as what
Minister Kang told us," said the party's spokesman, Park Sung-hup.
Seven group's of high-end home owners, mostly in affluent southern Seoul, filed
petitions with the top court in 2006, claiming the tax overlapped with regular
property taxes and was a violation of their rights.
While dismissing the petitioners' arguments that the tax law violates their
rights of equality and property, the court overturned the clause on the
family-based tax formula and ordered a revision of the law by the end of next
year.
hayney@yna.co.kr
(END)
SEOUL, Nov. 14 (Yonhap) -- Hard on the heels of a court ruling that effectively struck down a progressive tax law on high-end home owners, South Korea's conservative ruling party said Friday that it will promptly push for sweeping revisions.
The real estate tax, levied in addition to regular property taxes on high-value
homes, was first introduced in 2005 under the former Roh Moo-hyun administration
and was intended as a means to help redistribute the nation's wealth.
Ending two years of deliberation, the Constitutional Court declared Thursday that
the tax was unconstitutional as it was based on the total value of properties
owned by a household, rather than by individual owners. The formula was deemed by
the court as discriminatory against married couples as it violated the
Constitution's protection of marriage.
The verdict opens the way for the government to refund a significant portion of
the special tax and gives momentum to the Lee Myung-bak government's hopes of
revising or even scrapping the system entirely. Lee has long attempted to revamp
the tax, seeing it as a punitive measure against the wealthy that holds back the
country's economic revitalization.
While the ruling Grand National Party (GNP) has welcomed the court's decision and
is moving swiftly to fix the law, opposition parties are accusing the top
tribunal of playing puppet to the conservative government and the country's
privileged few. A revision appears inevitable, however, as the GNP controls an
absolute majority of 172 seats in the 299-member unicameral house.
"We fully respect the court's decision and plan to make haste in revising the law
to make it conform with the verdict," said the ruling party's chief policymaker
Yim Tae-hee. "Wrongfully collected money will be given back as soon as possible
and we will see to it that a revision of the real estate tax will not affect
overall tax revenue."
The party will consult the government in rewriting the plan, especially as
changes need to be made on a pending reform bill, Yim added. The revision calls
for raising the tax threshold to houses priced at 900 million won (US$780,000)
from the current 600 million won, which the Lee government says will ease the
burden on expensive homeowners.
Following the court ruling and the government-led revision, only spouses owning
properties worth up to 1.8 billion, or 900 million won each, will be subject to
the tax. That tax bar is extremely high, however, even for government and ruling
party standards.
Of the 379,000 people who paid the real estate tax last year, only 147,000, or 38
percent, owned just one residence, while 61,000 owned more than five, according
to government data.
Calling the court ruling a "bad verdict," chairman of the main opposition
Democratic Party said it will fight against any revision of the tax "using all
possible means."
"The court stood by the strong, instead of taking the side of 98 percent of the
Korean people," said party leader Chung Sye-kyun. "We will stand by the middle-
and lower-income people. There will be no changes in this necessary tax."
The main opposition accuses the Lee government of attempting to increase regular
property taxes to fill in for the lost tax revenue expected to come about as a
result of the tax revision.
The minority Democratic Labor Party, meanwhile, escalated allegations that
Finance Minister Kang Man-soo abused his power to influence the court's decision.
Kang had hinted that his ministry discussed the legality of the real estate tax
law during last week's parliamentary session. Kang later explained it was a
misunderstanding caused by a "verbal lapse," but the parliament launched an
independent probe on the allegations this week.
"No one was surprised by the court's decision. It was exactly the same as what
Minister Kang told us," said the party's spokesman, Park Sung-hup.
Seven group's of high-end home owners, mostly in affluent southern Seoul, filed
petitions with the top court in 2006, claiming the tax overlapped with regular
property taxes and was a violation of their rights.
While dismissing the petitioners' arguments that the tax law violates their
rights of equality and property, the court overturned the clause on the
family-based tax formula and ordered a revision of the law by the end of next
year.
hayney@yna.co.kr
(END)
