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The Improvement Plan of the Calculation System of Current Base Value in Local Taxes

  • Public Land Law Review
  • Abbr : KPLLR
  • 2009, 44(), pp.309-330
  • Publisher : Korean Public Land Law Association
  • Research Area : Social Science > Law

유상호 1

1서울시 세제과

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ABSTRACT

The local Taxes such as Acquisition Tax, Registration Tax and Property Tax are calculated by multiplying the value of tax base to tax rates. Therefore the Current Base Value (CBV) is a very important factor affecting directly the tax burden taxpayers are to be paid. The CBV takes the most part in the value of CBV of local taxes. The CBV in land had been based on the price of land that was calculated by the land class, but it was changed to the Publicized Individual Land Prices (PILP) in 1996. The CBV of buildings in the past was based in the cost of building construction that was calculated by multiplying the factors of structure, use and location of building to the Standard Value of Newly Constructed Building. However it has been raised continually by many questions that the CBV of buildings calculated by the cost method is not an adequate method to reflect properly the fair market value (FMV). As a result the Publicized Individual Housing Prices (PIHP) reflecting the FMV of the house and its land at the same time was introduced only to housing among buildings in 2005. Yet the CBV on those none housing buildings such as commercial buildings and offices are still calculated by the cost method (CM). Thereforethe commercial buildings used by various purposes but calculated by the simple CM with a large scale have a big difference between the CBV and FMV. As a consequence the CBV calculated by the CM in the commercial buildings and offices has beena main cause of public resentment because the CBV is higher than the FMV. The CBV may not be a proper method to tax those buildings because its value could be different according to the floor location. To reflect the FMV into those buildings, it needs to introduce a mass evaluation method adapted already in the PIHP. It means that the appraiser selects and evaluates in detail the example buildings, and then he or she evaluates other buildings based on the results. In addition, the appraiser needs to reflect the FMV in full using the transaction data accumulated in the market as well as profits and cost data. Even though this evaluation system requires high cost, it may be possible to appraise those buildings fairly and accurately. The every price of real estates must be opened to the public without regard to housing or non housing, and the current CM of CBV on the commercial buildings should be abolished. Furthermore with regard to the decision whether a building is housing or non housing, the taxation should be made according to the real use instead of the inspection results of tax officers or the return of building owners.

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