Review of Comprehensive Real Estate Tax from The Perspective of Property Taxation

In South Korea, the recurrent tax on real estate is a dual structure composed of property tax and comprehensive real estate tax. The biggest advantage of the recurrent tax lies in its ability to secure tax revenues. The recurrent tax can function as the price of local public services. The recurrent tax can complement income tax by performing a distributive role and is theoretically explained as being able to achieve stabilization of the real estate market through changes in tax burden. The review of the comprehensive real estate tax is as follows. First, since its introduction, the tax revenue has shown significant volatility as it has been used as a policy tool. Second, the comprehensive real estate tax is difficult to regard as the price of local public services because it is levied on an individual’s total values of real estate and the full amount is transferred to local governments as the real estate share tax. Third, the current comprehensive real estate tax is designed to maintain the property tax system, making it insufficient forx achieving the distributive goal. Fourth, the impact of the comprehensive real estate tax on stabilizing the real estate market is difficult to empirically prove due to frequent policy changes in response to fluctuations in the real estate market. Recently, as the issue of asset disparity due to the rise in asset values has emerged worldwide, it is necessary to review the role and necessity of the comprehensive real estate tax and redesign the system accordingly.