"House Prices Falling, So Why the Tax Bomb?"... Collective Objection from Gangnam 3 Districts

Eunma Apartment "Indiscriminate Increase... An Unfair Act Violating Equity" Backlash
Seocho and Songpa Districts Also Show Organized Movements

[Asia Economy Reporter Choi Dong-hyun] Residents of apartment complexes in the Seoul Gangnam 3 districts (Seocho, Gangnam, Songpa), where the official public housing prices have surged by about 20% this year, are showing signs of collectively filing objections to the official prices. This is due to growing dissatisfaction over bearing excessive tax burdens amid a recent reversal in the housing price decline.

According to industry sources on the 25th, the 'Eunma Bansanghoe,' an emergency countermeasure committee for the reconstruction project of Eunma Apartments in Daechi-dong, Gangnam-gu, Seoul, recently filed group objections to the apartment's official public housing prices. They also encouraged participation in the objection process by posting so-called 'proof shots' on an online community. A resident of this apartment stated, "How can retirees with low income or elderly people bear the taxes if the official prices are indiscriminately raised?" and added, "Despite the price of Eunma falling due to government regulations, sharply raising the official prices of these aging apartments is unfair."

The residents of this apartment argue that the increase rate of the official prices this year is excessively high compared to other complexes in Gangnam-gu. According to the official public housing price announcement for this year by the Ministry of Land, Infrastructure and Transport on the 18th, the price increase rate in Gangnam-gu was 25.57%, the highest among all cities, counties, and districts nationwide. Specifically, the official price of a 76.79㎡ (exclusive area) unit on the 7th floor of Building 1 in Eunma Apartments surged 38% to 1.392 billion KRW this year from 1.08 billion KRW last year. This is 13 percentage points higher than the Gangnam-gu average. The official price of a larger 84.43㎡ unit on the 7th floor of Building 23 also rose 38% to 1.59 billion KRW from 1.152 billion KRW last year. The property tax for owners of these apartments is expected to increase by 42% to 5.401 million KRW this year from 3.729 million KRW last year.

Organized movements to file objections to official prices have also been detected in apartment complexes in Seocho-gu and Songpa-gu, also part of the Gangnam area. Discussions on such countermeasures are ongoing not only within each complex but also in local communities and mom cafes. As for the objection filing methods, some use visits to district offices or fax, but most are understood to use online methods to avoid face-to-face contact.

This movement among Gangnam residents is partly attributed to the learning effect from last year's official price objections. Last year, the number of objections to public housing prices reached 28,735, the highest since 2007, with 6,183 cases (21.8% of the total) reflected in the final decisions. Among these, 108 were upward adjustments and 6,075 were downward. Consequently, the public housing price change rate for 2019 was lowered from the initially announced 5.32% to 5.24%. In Gangnam-gu, it was adjusted from 15.92% to 15.55%. A Gangnam-gu office official said, "Proxy submissions are being made through direct visits to the district office or local community centers," and added, "This year, due to the impact of COVID-19, online submissions are expected to be more common."

The deadline for filing objections to official public housing prices is until the 8th of next month, and once opinions are collected, frontline district offices will forward them to the Korea Appraisal Board.

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