South Korea’s National Tax Service will for the first time this year seek out and refund comprehensive real estate tax overpaid by married couples who jointly own a single home and either did not know about a special filing option or misjudged whether it would benefit them. The agency will calculate and tell each couple whether applying for the option leaves them with a lower bill.
Lim Kwang-hyun, commissioner of the National Tax Service, said on Facebook on the 13th that “starting this year, the National Tax Service will for the first time calculate and inform married couples who jointly own a single home of the most favorable comprehensive real estate tax.” The commissioner added, “We will also find and return the tax that was overpaid because people did not know.”
Couples who jointly own a single home can apply for the special option from the 16th to the 30th of this month. Under this year’s rules, choosing the option deducts 1.2 billion won from the government-assessed value of the home, as with a sole owner of a single home, and allows tax credits based on age and length of ownership. Without the option, no tax credits apply, but each spouse receives a basic deduction of 900 million won, for a combined 1.8 billion won. If this year’s tax revision bill clears the National Assembly, the basic deduction framework will change from next year, which could also change which choice is more advantageous.
Applying for the option is not always the better choice, the commissioner said, because the tax burden shifts with the price of the home and the owners’ age and length of ownership. Until now, taxpayers had to log in to the Hometax portal themselves, run a simulation and then decide whether to apply or cancel. Taxpayers unfamiliar with tax law had to judge for themselves which option was better, the commissioner said, noting that the burden fell especially hard on older taxpayers.
The agency will address the problem this year by telling taxpayers directly which option costs less. “In this review, we found about 5,700 people for whom applying for the option is more favorable in tax terms, and about 2,900 existing applicants for whom canceling the option is more favorable,” the commissioner said. The agency will identify those roughly 8,600 taxpayers in advance and notify each of them individually, by mobile message or mail, of the estimated tax calculated under the more favorable method.
Taxpayers who receive the notice can then file an application or cancellation between the 16th and the 30th of this month. The tax will be billed automatically at the most favorable calculated amount in the regular November notice, the commissioner said. Those who cannot decide during that window can still choose the more favorable method when filing the regular comprehensive real estate tax return in December.
The agency also plans to identify and refund cases in which taxpayers paid more because they misjudged the option. “The National Tax Service will look directly for people who paid more tax in the past because they did not know about the option or did not properly weigh which choice was better,” the commissioner said. Rather than leaving taxpayers to confirm overpayments themselves and request a correction, the tax authority intends to find refund recipients on its own.
As a member of the National Assembly in October 2024, the commissioner was the lead sponsor of a bill to amend the comprehensive real estate tax law so that the National Tax Service would inform couples who jointly own a single home in advance of which option benefits them. The concerns raised then have now been built into tax administration, extending beyond advance notice to refunds for past overpayments.
“We will expand tailored guidance in areas where taxpayers find it hard to judge for themselves, reducing inconvenience and making sure they do not miss benefits they are entitled to,” the commissioner said.