Lawmaker pushes property tax cuts for retail spaces vacant more than 2 years

The National Assembly is moving to cut property taxes on vacant retail spaces that are in effect shuttered.

Rep. Kim Jun-hyeok of the Democratic Party of Korea (Suwon, Gyeonggi Province) said Tuesday he introduced a bill Monday to amend the Local Tax Special Cases Limitation Act that would halve property taxes on commercial buildings that have generated no use or income for two or more consecutive years.

Kim said the spread of online commerce has pushed vacancy rates higher at brick-and-mortar retail spaces, placing a growing burden on property owners.

Data from the Korea Real Estate Board's commercial real estate rental trend survey show the national average vacancy rate has risen steadily. For mid- to large-size retail spaces, the rate climbed from 13.2 percent in the first quarter of 2022 to 13.7 percent in the first quarter of 2024 and 14.1 percent in the first quarter of 2026. Smaller retail spaces saw a similar trend, rising from 6.4 percent in the first quarter of 2022 to 7.6 percent in the first quarter of 2024 and 8.3 percent in the first quarter of 2026.

Concerns have also been raised that property owners face a double burden — hit with property tax bills even when their units are effectively inoperable because a developer or project operator went bankrupt, cutting off electricity and water.

The bill would reduce property taxes by 50 percent on commercial buildings that have gone unused and generated no income for two or more consecutive years.

"If property owners continue to face tax burdens with no income coming in, there is a risk of a vicious cycle — buildings fall into disrepair and local commercial districts deteriorate as owners give up on maintenance," Kim said. "Government-level support measures for small business owners who are suffering are urgently needed."