Corporate-owned real estate under scrutiny as gov't moves to raise holding taxes
A notice on property holding taxes is posted at a real estate agency in Seoul, Wednesday. Yonhap
A sweeping government review of corporate-owned, nonbusiness real estate is underway after President Lee Jae Myung called for tougher measures to raise the holding burden on such assets, officials said Monday.
As part of the move, the National Tax Service (NTS) launched a comprehensive inspection of more than 2,600 high-value homes worth over 900 million won ($605,000), each held by corporate entities. The probe will examine whether controlling shareholders and their families have occupied these properties without paying fair compensation, potentially evading taxes.
Other relevant ministries, including the Ministry of Finance and Economy, are also preparing to conduct a review of corporate nonbusiness land holdings.
On Thursday, Lee called for a review of measures to impose heavier holding costs on nonbusiness real estate owned by companies, in line with the government’s push to strengthen holding taxes, such as the comprehensive real estate tax and property tax. The move is aimed at curbing real estate speculation, stabilizing the market and promoting more efficient use of corporate-held land.
Data from the NTS shows that about 1,600 corporations owned high-end homes valued above 900 million won. In total, these entities held 2,630 such units, with a combined appraised value of 5.4 trillion won. The portfolio also included ultraluxury apartments priced at over 10 billion won.
“Properties used for employee housing or rental purposes pose no tax issue,” NTS Commissioner Lim Kwang-hyun said in a Facebook post. “However, if owner families live in corporate-held homes without paying proper taxes, it constitutes tax evasion. Diverting corporate resources toward private use rather than productive investment is a serious problem.”
Building on the current probe, the government plans to expand the scope to include properties below the high-end threshold. Cases showing suspected tax evasion will be escalated to full-scale tax audits, with unpaid taxes to be collected.
At the same time, authorities will conduct detailed inspections into how other nonbusiness real estate held under corporate names, including land, is being used.
Momentum for stricter regulation is also building in political circles. Speaking at a party meeting, Rep. Han Byung-do, floor leader of the ruling Democratic Party of Korea, called for an end to the entrenched practice of companies accumulating property for asset gains.
“Companies should either redirect such assets to productive uses like research and development or sell them to help expand housing supply,” he said.
According to data from the Ministry of the Interior and Safety, land subject to comprehensive aggregate taxation, including corporate nonbusiness land, totaled 2,126 square kilometers as of 2024, about 730 times the size of Seoul’s Yeouido.
Civic groups have consistently called for tighter regulation, citing the rapid increase in real estate assets held by large conglomerates. Data from the Citizens’ Coalition for Economic Justice show that the book value of land assets owned by five major groups — Samsung, SK, Hyundai Motor, LG and Lotte — rose by more than 47 trillion won between 2007 and 2022.