Origins: who built it and why
Property tax (jaesan-se) is levied by cities, counties and districts on whoever actually owns land, housing, buildings, ships or aircraft on June 1. Unlike the national comprehensive real estate holding tax, it funds local services. Korea's modern version multiplies an official assessed value by a fair-market-value ratio, then applies progressive statutory rates. Thinkers from Henry George (1879) to Tiebout (1956) and Zodrow (2001) frame why holding taxes exist and who may bear them—a question of tax incidence.
How the bill is calculated
For housing: multiply the official home value by the fair-market-value ratio (often 60%; some single-home years used 43–45%), apply progressive rates, add a 0.14% urban-area component where applicable, then apply year-on-year caps (Ministry of the Interior and Safety, n.d.; Local Tax Act art. 111).
| Housing tax base | Standard rate |
|---|---|
| ≤ KRW 60m | 0.1% |
| ≤ 150m | KRW 60,000 + 0.15% on excess |
| ≤ 300m | 195,000 + 0.25% on excess |
| > 300m | 570,000 + 0.4% on excess |
Housing is usually billed half in mid-July and half in mid-September. Small housing bills may be due entirely in July.
How it differs from jongbuse and capital gains tax
Property tax is the local annual holding tax; jongbuse is an extra national tax on high official values, due in December. Sale triggers capital gains tax; transfers may involve inheritance tax or gift tax. Oates (1969) showed holding taxes capitalize into prices, so rates interact with credit rules such as LTV limits.
Myths and a checklist
- Ownership on June 1 decides who pays that year.
- Jeonse tenants are not the taxpayer (though rent may embed some cost).
- Paying jongbuse does not cancel the local bill.
- Compare the marginal vs effective rate before panicking at the top bracket.
FAQ
- Do tenants pay property tax?
- No. The factual owner does.
- If I pay jongbuse, do I skip property tax?
- No. You generally receive both; jongbuse only credits part of the local tax in its own formula.
Sources reviewed: 2026-11-06
References
- George, H. (1879). Progress and poverty: An inquiry into the cause of industrial depressions and of increase of want with increase of wealth. D. Appleton. The founding text of land-value taxation and the moral case for holding taxes.
- Tiebout, C. M. (1956). A pure theory of local expenditures. Journal of Political Economy, 64(5), 416–424. Classic 'voting with your feet' model of local taxes and services.
- Oates, W. E. (1969). The effects of property taxes and local public spending on property values: An empirical study of tax capitalization and the Tiebout hypothesis. Journal of Political Economy, 77(6), 957–971. Evidence that property taxes are capitalized into home values.
- Zodrow, G. R. (2001). The property tax as a capital tax: A room with three views. National Tax Journal, 54(1), 139–156. Compares three views of who really bears the property tax.
- 행정안전부. (n.d.). 재산세 안내 [정부24]. Official Government24 guide to Korea's local property tax.
- 지방세법 제111조 (세율). Statutory standard rates for housing, land and buildings.
- 행정안전부. (2024). 1주택자 공정시장가액비율 43~45% 유지 [정책브리핑]. Policy note keeping the single-home fair-market-value ratio at 43–45%.