Outdated Regulations Create Unfair Tax Burden in South Korea: A Case for Reform

A recent controversy in South Korea highlights the unfairness of a 50-year-old regulation that categorizes homes as luxury based on size and amenities, resulting in a disproportionate tax burden for those living outside of Seoul. Despite a surge in the standard of living, the outdated criteria for luxury housing have not been updated. This has led to a situation where luxury apartments in Seoul benefit from lower tax rates compared to homes in the provinces, even if they are more expensive. A homeowner in Gyeonggi-do, a province outside Seoul, with a two-story house over 331 square meters with an elevator faces a significantly higher tax burden than the owner of a luxury apartment in Seoul, despite the Seoul apartment potentially being worth 100 billion won. This disparity creates a sense of injustice and prompts calls for reform. Experts are advocating for a modernization of the luxury home classification system, taking into account the current economic reality and the increasing demand for high-end housing.