Office-tel Standard Market Price Rises Double Digits in 3 Years... Will It Reach 10 Million KRW per ㎡ Next Year?

[Asia Economy Reporter Kwangho Lee] The standard market prices of officetels and commercial buildings have increased by 1 to 2% this year. Although this is significantly lower compared to the rate of change in 2019, prices have risen by more than 10% over the past three years.

According to the National Tax Service on the 4th, the standard market prices for officetels and commercial buildings applied from January 1 this year increased by an average of 1.36% and 2.39% nationwide, respectively, compared to the previous year.

The standard market price is applied when taxing inheritance, gift, and capital gains taxes. In principle, inheritance and gift taxes are levied based on market prices, but if the market price is unknown, the officially announced standard market price is used as the basis. Capital gains tax uses the standard market price to calculate the 'converted acquisition cost' for taxation when the actual transaction price cannot be confirmed.

This year's rate of change is significantly lower compared to last year's rate of change (officetels 7.52%, commercial buildings 7.57%). However, prices have increased every year: 1.56% and 0.83% in 2016, 3.84% and 2.57% in 2017, 3.69% and 2.87% in 2018, and 7.52% and 7.56% in 2019.

In particular, the rate of change in Seoul is steep. Seoul officetels rose by 1.56% in 2016, 4.70% in 2017, 5.02% in 2018, 9.36% in 2019, and 3.36% this year.

Following Seoul, prices also increased in Daejeon (1.91%), Gyeonggi (0.36%), and Gwangju (0.15%). Conversely, prices declined in Sejong (-4.14%), Daegu (-2.41%), Incheon (-2.30%), Ulsan (-2.22%), and Busan (-1.33%).

The officetel with the highest standard market price per unit area (㎡) is The Rivers Cheongdam located in Cheongdam-dong, Gangnam-gu, Seoul, reaching 9,369,000 KRW. Next is Lotte World and Lotte World Mall World Tower in Sincheon-dong, Songpa-gu (8,601,000 KRW). Following are Gangnam Station Twenty-First Building 102 in Yeoksam-dong, Gangnam-gu (6,386,000 KRW), and Banpo Stay 2nd in Bangbae-dong, Seocho-gu (6,181,000 KRW). Accordingly, there are expectations that the standard market price per ㎡ will exceed 10 million KRW next year.

Additionally, the most expensive commercial building is Cheongpyeonghwa Market in Sindang-dong, Jung-gu, priced at 24,175,000 KRW per ㎡. Following are Jamsil Jugong 5 Complex Shopping Mall in Jamsil-dong, Songpa-gu (22,487,000 KRW), Dongdaemun Shopping Mall D Building in Jongno 6-ga, Jongno-gu (19,906,000 KRW), Dongdaemun Shopping Mall B Building in Jongno 6-ga, Jongno-gu (16,391,000 KRW), and Jeil Pyeonghwa Market Shopping Mall 1 Building 775 in Sindang-dong, Jung-gu (16,259,000 KRW).

For mixed-use buildings, Diot in Jung-gu remained the most expensive at 12,976,000 KRW, continuing from last year. Daechi Classia in Daechi-dong, Gangnam-gu (8,582,000 KRW) and Anobli81 in Cheongdam-dong, Gangnam-gu (8,239,000 KRW) also ranked within the top three.

Owners of officetels and commercial buildings can view the prices on the National Tax Service website or Hometax. Owners who have objections to the standard market price can also apply for a reassessment.

Applications for reassessment can be submitted from today until the 31st of this month. After receiving applications, the National Tax Service plans to re-investigate the submitted properties and notify the results by the 28th of next month.

Meanwhile, the National Tax Service also announced the 'general building standard market price calculation method' applicable this year. This is necessary for taxing inheritance, gift, and capital gains taxes on buildings other than houses, officetels, and commercial buildings, whose land and building prices are evaluated collectively. The general building standard market price is calculated by multiplying the amount per ㎡ by the area of the building subject to evaluation. The amount per ㎡ is the product of the building construction price standard amount, structure index, usage index, location index, residual value rate by elapsed years, and individual characteristic adjustment rate. In this year's calculation, the building construction price standard amount was set at 730,000 KRW per ㎡, which is 20,000 KRW higher than last year.

This content was produced with the assistance of AI translation services.