When it comes to the ratio of property tax to the gross domestic product in 2020, South Korea ranked second among members of the Organization for Economic Cooperation and Development. The country's on-year growth was the highest among members of the organization, and its ranking in terms of the ratio improved by four places from a year earlier.
A recent analysis by the Paris-based organization found that Korea had a property tax ratio of 3.97 percent to GDP as of 2020, with the capital gains tax on trading in homes and land accounting for the vast majority of the total tax revenue.
Canada took first place on the list with a 4.15 percent share, followed by Korea and France, which tied for second place with a 4.15 percent share. The figure for Australia was not included in the total of 38 participants.
The Organization for Economic Cooperation and Development (OECD) clarified that the property tax includes "taxes on immovable property or net wealth, taxes on the transfer of ownership of the property through inheritance or gift, and taxes on financial and capital transactions," according to their definition.
Korea maintained its sixth-place ranking with 3.11 percent in 2019, but the country's ratio increased by 0.86 percentage points in a single year, the fastest growth in the Organization for Economic Cooperation and Development (OECD).
Furthermore, the ratio of property tax to GDP has grown at the fastest rate in terms of growth for the last three years, reaching 2.96 percent in 2017 and placing the country ninth in the world. In 2018, the ranking climbed to seventh place, thanks to a 3.09 percent increase.
Korea surpassed Greece, Israel, Belgium, Luxembourg, the United Kingdom, and the United States during the 2017-2020 period.
During the three-year period, Korea experienced the highest percentage point increase of any of the members, at 1.01 percentage points. The ratio decreased in some countries, including the United States, the United Kingdom, Italy, Spain, Sweden, Mexico, and Turkey.
Japan's ratio increased by 0.1 percentage point to 2.63 percent by 2020, despite the fact that the country also experienced an increase over the corresponding period.
While the organization has not yet released the 2020 average for its 38 members, the average was 1.87 percent in 2017, 1.81 percent in 2018, and 1.8 percent in 2019. The average was 1.87 percent in 2017, 1.81 percent in 2018, and 1.8 percent in 2019.
On the basis of this trajectory, it is possible that Korea will surpass Canada as the OECD country with the highest household burden on real estate taxes in the near future, possibly as early as the 2020s.
The comprehensive real estate tax has received a great deal of attention under the Moon Jae-in administration, which has been in power since May 2017. The comprehensive real estate tax is part of Korea's effort to implement active taxation on multiple-home owners and landowners.
In addition, as a result of the record-breaking rise in housing prices over the past four years, a large proportion of homeowners in Seoul and some major cities have had their property taxes increased significantly by the government.
