Korea ranks second in the OECD when it comes to the ratio of property tax to GDP, according to the Paris-based group of rich countries. Korea's ranking has shot up from 11th place in 2016.
Korea's nominal GDP increased 11.1 percent from W1.74 quadrillion in 2016 to W1.93 quadrillion in 2020 (US$1=W1,191). But over the same period, its property tax surged 51 percent amid failed government attempts to tame housing prices and rein in speculation.
Korea's property tax-to-GDP ratio stood at 3.98 percent in 2020, the second highest after Canada's 4.15 percent and ahead of the U.K.'s 3.86 percent, the U.S.' 3.05 percent and Japan's 2.63 percent.
Property taxes here includes real estate tax, gift and inheritance tax and acquisition tax.
Korea ranked at the top of the OECD in terms of taxes leaved when selling or acquiring properties, which is whopping six times higher than the average among the member countries.
Moreover, the OECD data exclude capital gains tax. Korea does not levy taxes on stock transactions except for major shareholders, so most of the capital gains tax involves real estate transactions. If this is included, Korea ranks right at the top of the OECD.
Investment adviser Lee Sang-woo said, "The fact that the increase in taxes is higher than GDP growth shows that the government excessively raised taxes. The government failed to tame real estate prices even after drastically raising all related taxes and ended up making it harder for low-income households to buy homes."
And Jung Su-yeon at Jeju National University said, "At a time when the entire public is suffering in the coronavirus pandemic, the government has been raising taxes across the board which leads to a heavier burden on taxpayers."
