Land Value Taxation in South Korea

This case study will describe and discuss Korea’s most representative land value tax, called Aggregate Land Tax (ALT) adopted in 1990 as an important measure of property tax reform. The measure was introduced with two stated goals: stabilizing real estate prices at a time of rapid land price inflation, and ameliorating the land ownership distribution. The ALT is a local tax in the sense that the proceeds belong to the local government, but the tax base and rate schedule are uniform across the country, with progressive tax rate schedules applied on the total value of individual owner’s landholdings aggregated on a national basis. The essential features of the ALT will be reviewed and the lessons gained from the 10 years of experience discussed by identifying some critical issues on equity, efficiency and administration.