Last year, nearly one-third of the nationwide housing comprehensive real estate tax was concentrated in the three districts of Gangnam, Seocho, and Songpa in Seoul. As housing prices surged in high-end areas, the share of the comprehensive real estate tax from these districts reached its highest level in five years. With discussions on reforming real estate taxation intensifying, the debate over property taxes is expected to reignite.
According to the National Tax Service's tax statistics portal, the total comprehensive real estate tax for residential properties nationwide was 13.089 trillion won last year. Of this, the three Gangnam districts contributed 4.3 trillion won, accounting for 32.9% of the total.
The concentration of tax burden in the Gangnam districts has expanded for three consecutive years. Their share of the nationwide housing comprehensive real estate tax decreased from 39.5% in 2020 to 27.8% in 2021 and 25.6% in 2022. However, it rebounded to 27.6% in 2023 and 29.2% in 2024, marking the highest proportion in five years since 2020.
The increase in tax burden in these districts outpaced the national average. The comprehensive real estate tax for residential properties in the Gangnam districts rose by 35.2%, from 3.181 trillion won in 2024 to 4.3 trillion won last year. In comparison, the nationwide increase was 20.4%. The total comprehensive real estate tax for all residential properties in Seoul also grew from 5.698 trillion won to 7.411 trillion won, a 30.1% increase, but still fell short of the growth rate in the Gangnam districts.
By district, Gangnam had the highest tax burden, with 2.336 trillion won, making it the top contributor among Seoul's districts. Seocho followed with 1.429 trillion won, Yongsan with 750 billion won, and Songpa with 534 billion won. Together, Gangnam and Seocho accounted for more than half of Seoul's total comprehensive real estate tax.
The increase in the tax burden in the Gangnam districts is closely linked to rising prices of high-end properties. Recently, the housing market in Seoul has shown clear regional polarization. Despite loan regulations and high-interest burdens, key complexes in the Gangnam area have continued to see price increases due to limited new constructions, strong educational, transportation, and living infrastructure, and expectations for redevelopment. In contrast, outer regions and provincial areas have faced sluggish transactions and unsold inventory, leading to a widening gap.
The growing tax burden is likely to serve as a key argument in future discussions on property taxes. The government is set to hold a national public debate on real estate on the 23rd, with open discussions planned across various sectors, including supply, finance, and taxation. As the possibility of reforming the overall real estate tax system, including property and transaction taxes, is being discussed, the statistics on the concentration of comprehensive real estate tax in the Gangnam districts could bolster arguments for increased taxation on high-end properties.
The Gangnam area remains a market with significant alternative demand. Analysts suggest that the combination of educational, proximity to workplaces, and asset preservation needs makes it difficult for tax burdens alone to significantly increase the supply of properties. There is also a possibility that discussions on strengthening property taxes could lead to concerns about the burden on actual homeowners, particularly elderly single-homeowners or long-term holders in the Gangnam area, prompting discussions on tax deductions and deferrals.
An industry insider stated, “The fact that the share of comprehensive real estate tax from the Gangnam districts has risen back to the 30% range indicates that the concentration of high-end property assets remains strong. While discussions on reforming property taxes are inevitable, it will be challenging to control housing prices in the Gangnam area solely through taxation, so we must also consider measures for supply, loans, and rental stability.”
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.