Korean Job Discussion Forums :: View topic - Buying property here with cash

Speak Korean Now!

Teach English Abroad and Get Paid to see the World!

Korean Job Discussion Forums
"The Internet's Meeting Place for ESL/EFL Teachers from Around the World!"

FAQ

Memberlist

Usergroups

Profile

Buying property here with cash
Goto page Previous 1, 2, 3, 4 Next

Korean Job Discussion Forums Forum Index -> General Discussion Forum

View previous topic :: View next topic

Author

Message

giraffe

Joined: 07 Apr 2009

Posted: Sun Aug 25, 2013 5:29 pm Post subject:

Weigookin74 wrote:

But it does drive a point that as a teacher here renting a villa, fees and taxes are low. But once you start owning and making more money, the government really gets their claws into you, don't they?

No matter how you put it I think overtime you end up paying alot alot less taxes here in Korea than you do back west in countries like canada or the USA. I actually quite like the tax system here. Its setup in a way that people can actually Save money...

Back home my salary would be taxed close to 35%. Here my salary is only taxed less than 3%... by salary I'm not talking about a typical 2.2 million teacher salary.. something much higher... The more you own here in korea the more taxes youll pay. For example if you own one car your health insurance price will go up depending on what kind of car you drive/ how expensive it is. If you own an apt your health insurance will also go up. And yes the more apts you own the more taxes you have to pay... Having more money = giving more money to the gov...

In my sistuation, I'll never pay nearly as much money to the korean gov than i had to to the canadian gov... I'm very happy with the system here. Its allowed me to buy an apt with 100% Cash ( no loans) in a few years. compared to not being able to save alot ( even on a very high salary) in Canada and having to get a 20+ year mortgage to pay a house... In my book theres no comparing...

The 10 million won first owner property tax I was talking about is roughly how much ill pay on the apt we bought after we move in. Not EVERY apts will pay that much. It depends on how much your apt is worth , how big it is and where its located. I'm sure some smaller apts will cost very little in tax maybe 2-4 million... Then Every year after that it will be very little in taxes...

However, Again , thats more or less a one time fee. I'd much rather pay 10 million up front than have to pay your sisters 3000$ a year. after 5 years your sister will pay alot more in property taxes than I ever will in 10 years, That is if we stay at the same place just for the sake of comparing. After 10 years that would be like 30000$ of property taxes where as it only be maybe less than 15 million for my apt..

Now lets not get into which place has better quality of life. =). I'm sure your sister has a nice yard , decent sized home and nice parking etc... its great quality living obviously I'd love to have a nice big yard and house...

BUt I'm just comparing how property taxes work...

edwardcatflap

Joined: 22 Mar 2009

Posted: Sun Aug 25, 2013 6:26 pm Post subject:

Quote:

Here my salary is only taxed less than 3%... by salary I'm not talking about a typical 2.2 million teacher salary.. something much higher...

If it's something 'much higher' than 2.2. million you should be paying something much higher than 3% in tax

Captain Corea

Joined: 28 Feb 2005
Location: Seoul

Posted: Sun Aug 25, 2013 6:37 pm Post subject:

edwardcatflap wrote:

Quote:

Here my salary is only taxed less than 3%... by salary I'm not talking about a typical 2.2 million teacher salary.. something much higher...

If it's something 'much higher' than 2.2. million you should be paying something much higher than 3% in tax

I thought that 3% tax rate for foreign contract workers was done away with (?)

giraffe

Joined: 07 Apr 2009

Posted: Sun Aug 25, 2013 7:14 pm Post subject:

edwardcatflap wrote:

Quote:

Here my salary is only taxed less than 3%... by salary I'm not talking about a typical 2.2 million teacher salary.. something much higher...

If it's something 'much higher' than 2.2. million you should be paying something much higher than 3% in tax

Nope. Depends where your income comes from and what type of work you do ...

My income comes 100% from USA or the Uk . I'm a freelancer in the arts field. I also pay an accountant 500k won every year to do my taxes and make sure I'm legal in every way .... In my circumstance I pay very little income taxe compared to my salary it ends up being less than 3%.

However , I'm not including health insurance .... If I add Korean Health insurance the more money you make the more insurance you have to pay. I think right now my wife and i have to pay close to 400k won in Korean health insurance a month ..

Either way this is pennies compared to how much taxes I used to pay in Canada with the same salary.

edwardcatflap

Joined: 22 Mar 2009

Posted: Sun Aug 25, 2013 7:23 pm Post subject:

Quote:

Well no offense but it sounds a bit dodgy to me. Why should you be paying a lower rate of income tax than everyone else. Here or in the US/UK?

giraffe

Joined: 07 Apr 2009

Posted: Sun Aug 25, 2013 7:31 pm Post subject:

Captain Corea wrote:

I thought that 3% tax rate for foreign contract workers was done away with (?)

No clue I just let my accountant take care of it ... It's not as easy as just applying a flat 3% rate to my salary. I'm probably paying closer to 10 or 15% tax rate. But it's only applied to a small portion of my overall salary .. But when you count how much taxes I pay on the over all salary it end up being less than 3% ...

Soo for example depending on which tax bracket you're as a freelancer they'll deduct maybe 20 to 30 million won right off the bat and then after that they can put on write offs ie: any expenses pretty much like cellphones , rent , Internet etc. then he applies the tax rate to what's left over but I don't know all the details ...

I'd pay alot alot more if I was a salary worker in Korea or if I had a Korean boss or Korean income.

edwardcatflap

Joined: 22 Mar 2009

Posted: Sun Aug 25, 2013 7:46 pm Post subject:

Quote:

I'd pay alot alot more if I was a salary worker in Korea or if I had a Korean boss or Korean income.

Yeah don't worry. Us salaried workers will all make up the shortfall.

giraffe

Joined: 07 Apr 2009

Posted: Sun Aug 25, 2013 8:54 pm Post subject:

edwardcatflap wrote:

Well no offense but it sounds a bit dodgy to me. Why should you be paying a lower rate of income tax than everyone else. Here or in the US/UK?

No offence taken.. I dont pay a lower rate than everyone else.. but my taxes do get calculated differently because of my type of work/ income level. On the portion of my salary that i am taxed I pay somewhere close to 15%. HOWEVER as a freelance worker working for myself I'm pretty much setup as a business ( no business license though because I'm just 1 person so i dont need one) BUt I have access to gov Tax credits and I get to write off a bunch of stuff like my cellphones , rent ( my place of work) , internet , and basically any other expenses that are business related.. So Only a % of my full salary gets taxed..

As a freelance worker , it works the exact same way in Canada except My tax rate was up to 35% with less Write offs/ tax credits...

Theres absolutely nothing dodgy or sketchy about it. I claim my salary 100% everything is on my tax report. Theres nothing hidden. The accredited accountant doesnt do anything dogdy. Hes doing his job by applying tax credits and write off available to you where possible for your income level. Something the NTS agents dont know much about if you do your taxes there. SHould the Accountant make any mistakes The NTS offices double checks all his calculations. My accountant gives the NTS my freelance income and then makes a tax book with all my spending etc.. Its extremely transparent and straight forward and nothing is hidden. Costs me 500kwon a year to get this book done. Its worth it because if i would use the NTS accountants they dont provide this service and i would be taxed 15% on the whole income...

I pay my fair share of yearly taxes and health insurance. Up to 15 million a year...

I can tell you that while english teachers/ salary workers have access to tax refunds at the end of the year ( my wife does) . I will NEVER EVER get any of that. BUT on the other hand i have access to tax credits instead...

edited because Im adding more info =/

Last edited by giraffe on Sun Aug 25, 2013 10:18 pm; edited 5 times in total

giraffe

Joined: 07 Apr 2009

Posted: Sun Aug 25, 2013 9:03 pm Post subject:

edwardcatflap wrote:

Quote:

I'd pay alot alot more if I was a salary worker in Korea or if I had a Korean boss or Korean income.

Yeah don't worry. Us salarid workers will all make up the shortfall.

no, Salary workers have access to tax refunds and Their employer takes out money from their paycheck monthly. Your employer takes care of all the business overhead.. No to mention End of year bonuses and what ever other company bonus/benefits they have access too ( i'm talking about korean company workers) something which ill never have access to...

as a freelancer/ business i have to pay for my own overhead, office , business expenses etc.. I pay a large sum at the end of the year but i have access to tax credits with no possibility of tax refunds...

My wife is a hagwon teacher. Her boss takes her taxes from each paycheck. At the end of the year she gets a nice tax refund! and she ends up paying only like 1% of her salary to the gov once shes gets the refund... By taxes I'm only speaking income tax Not Gov health insurance... as I said Wife and I pay 400k / month health insurance. 5 million a year... SO we do pay our fair share...

a portion of my salary isnt taxed because I have costs that a typical office worker/ salary worker doesnt have to worry about. These tax credits are there to help self employed people / business. The portion of my salary that is taxed is taxed at around 15% or so. BUT when you look at the overall without tax credits and what not it only looks like im being taxed less than 3%.

( The following is just hypothetical I'm just giving random numbers ) Its not like I'm saying that I'm making 100 million + a year and only being taxed 2%. Its more like my "business" generates 100 million a year , I have access to 30 million in tax credits. on the 70 million I can add business write offs assiocated to my work ( computer costs, internet, renting space ,cellphones , business traveletc..) Say thats an other 20 million won. The Rest of the 50 million gets taxed at 15% or more ... Then my health insurance tax goes really high because they calculate that on the whole salary of 100million.... Of course there are really strict rules how these credits/ write offs can be applied! Which is why I would highly recommend getting a good accountant if you ever do make money outside a company...

I'm not the one that makes up these tax rules... The way things work here is why soo many businesses / self employed people can keep their business going and it works more or less the same in Canada..

EIther way It works out ALOT ALOT better here in korea. easier to save money and less taxes!

edwardcatflap

Joined: 22 Mar 2009

Posted: Sun Aug 25, 2013 11:03 pm Post subject:

Quote:

( The following is just hypothetical I'm just giving random numbers ) Its not like I'm saying that I'm making 100 million + a year and only being taxed 2%. Its more like my "business" generates 100 million a year , I have access to 30 million in tax credits. on the 70 million I can add business write offs assiocated to my work ( computer costs, internet, renting space ,cellphones , business traveletc..) Say thats an other 20 million won. The Rest of the 50 million gets taxed at 15% or more ... Then my health insurance tax goes really high because they calculate that on the whole salary of 100million.... Of course there are really strict rules how these credits/ write offs can be applied! Which is why I would highly recommend getting a good accountant if you ever do make money outside a company...

If you're being taxed 15% on 50 million You're being taxed 7.5% of your total salary aren't you?. Not less than 3%. Also how are you allowed to claim rent of the apartment you live in as non taxable. is that really legal?

giraffe

Joined: 07 Apr 2009

Posted: Sun Aug 25, 2013 11:14 pm Post subject:

edwardcatflap wrote:

Quote:

I did say the numbers were made up... I'm just trying to explain how my taxes work without having to give personal info/ real numbers on a forum. The example numbers werent accurate to my own personal taxes THey were just a general idea. ... The point is that I get access to tax credits and then i can do write offs and then whatever is left over is taxed at 15% or whatever number it is for your tax bracket.

Sorry, I should have been more specific about the APT. I dont live in an apt.. I live in an office tell and so its zoned as WORK/ LIVE in. Which allows me to write off the rent. If i lived in a normal apt i wouldnt be able to do this... For example , I purchased a new apt but its not built yet. When I move in I wont be able to write off anythign in terms of apt or apt costs even though im living / working there... I can only write off my office tel ren because well Its an office tell and I can legally work in here.. When people purchase officetels they either get it zoned for residence or zoned for Work place or both.. IF its zone for work place people cant legally live in there. Thats why alot of times when you move into an officetel you cant change your ARC card address because its not a proper living place. .. If my officetel was a live in office tel only i wouldnt be able to write off the Rent on my Taxes...

Doing things legally is really important to me as I dont want any issues/ trouble with any Gov body for when/ if i do go back to Canada. I have everything recorded legally by an accountant and everything is transparent.

Last edited by giraffe on Sun Aug 25, 2013 11:19 pm; edited 1 time in total

edwardcatflap

Joined: 22 Mar 2009

Posted: Sun Aug 25, 2013 11:18 pm Post subject:

OK fair enough. Good of you to explain everything. There was a joker on here a while ago who claimed he was making 8 million plus at a hagwan and paying less than 3% tax in the same way as you (as an IC) These kinds of stories annoy people who pay the normal rate. How would that be possible legally?

giraffe

Joined: 07 Apr 2009

Posted: Sun Aug 25, 2013 11:33 pm Post subject:

edwardcatflap wrote:

OK fair enough. Good of you to explain everything. There was a joker on here a while ago who claimed he was making 8 million plus at a hagwan and paying less than 3% tax in the same way as you (as an IC) These kinds of stories annoy people who pay the normal rate. How would that be possible legally?

Honestly, I have no idea how Hagwon payments work. My wife ( korean) is technically part time works maybe 25-30 hours a week. I dont know her exact tax rate but I know that she gets most of it back at the end of the year in tax refunds...

As for the guy making 8million a months @ 3% . That doesnt make sense to me. I would imagine his tax rate would go higher with the higher salary but I really wouldnt know. I'm not sure how english teacher salaries work. Perhaps There used to be a loop hole. Based on What Captain Corea said it seems the 3% tax was done away with. Not to mention he would be paying high health insurance costs like I do. Unless his boss was paying 50% of those health insurance costs.

Theres always the possibility that he was working under the table and not all his income was "legal".... Who knows!

IN my case, I wasnt saying I was getting a 3% flat tax rate on my salary. Its just seems like I am but thats if you dont include my business/work costs/ tax credits... That's why i broke it down so you could get the general idea of how taxes might be calculated for someone who freelances . Because of my salary bracket I have access to tax credits and write offs ( ONLY if i can prove with receipts etc..) . IF my salary was lower i wouldnt have access to as much writes off/ tax credits . IN that case id also pay a much lower income tax rate aswell. So say my freelance only generated 40 million won a year I wouldnt be taxed the same as i am now... It really does depend on how much you make a year and what kind of worker you are and to some degree where the money comes from..

I'm not in any kind of advantage over anyone. I pay a crap load of taxes Its just my taxes are calculated differently than Just being Income taxed a flat rate like an english teacher or office worker etc..

Weigookin74

Joined: 26 Oct 2009

Posted: Mon Aug 26, 2013 12:29 am Post subject:

giraffe wrote:

Weigookin74 wrote:

But it does drive a point that as a teacher here renting a villa, fees and taxes are low. But once you start owning and making more money, the government really gets their claws into you, don't they?

Fair enough and good point I guess. Just didn't know how it worked here. I was hoping it wasn't 10 mil a year. Surprised

PatrickGHBusan

Joined: 24 Jun 2008
Location: Busan (1997-2008) Canada 2008 -

Posted: Mon Aug 26, 2013 5:29 am Post subject:

Weigookin74 wrote:

PatrickGHBusan wrote:

edwardcatflap wrote:

Yes I meant paying directly from a bank account and not having to arrange a mortgage. Has no one done it here? In the UK you buy a place through a solicitor who checks the paper work, arranges a survey etc...and makes some checks on your personal finances. Was wondering if it worked the same way here.

We did it with our first and second apts in Busan. The one we own now was not paid for in full (almost).

We used a bank.

I will echo what was said earlier however: keep money aside for the taxes as those can be steep.

Also, apt complexes will charge you a fee even if you have no morgage. this fee is for maintenance of the building and whatever services are offered and can be pretty high in the newer apt towers.

Oh and weigookin74 you do realize that when you buy a house in or condo in Canada you have to pay property taxes even if you buy it outright and that most cities will also charge you a land tax (one time payment) based on the value of your property right?

You can also add school taxes to your housing purchase and living costs.

Finally, when you buy a new property (as in newly built) you have to pay sales taxes on it (this varies from province to province).

I think my sister pays over 3000 a year in property taxes. It's why I found 10 grand kind of steep. But if it's just a one time fee and you pay nothing after that, then I guess I can live with it if I had to. There is a tax on land transfers, but didn't think it was steep. But, thing is out east, if you own a second home as a rental property, property taxes are double. My dad tried to get into rentals, but found the taxes and hassle of renting to be so idiotic, he got out of them. I can only imagine how absurd a place like Vancouver must be with such crazy prices.

No...the one time payment (land tax) and municipal & school taxes are different.

You pay the land tax when you buy the property (one time) and then each year you pay municipal property taxes and a school tax as well.

If you own a apt building you will also pay taxes on the rent you collect.

Display posts from previous:

	Korean Job Discussion Forums Forum Index -> General Discussion Forum	All times are GMT - 8 Hours Goto page Previous 1, 2, 3, 4 Next
Page 3 of 4

You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum

TEFL International Supports Dave's ESL Cafe