"Officially Announced Prices Must Reflect Actual Transaction Prices" Seoul City Considers Expanding Standard Land and Standard Housing

Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Yuri Kim] The Seoul Metropolitan Government is considering expanding the number of 'standard real estates' such as standard land and standard houses to realize more accurate official property prices. This is based on the judgment that the current distribution criteria for standard real estates, redesigned in 2016, have not properly reflected price increases due to environmental changes since then. The city believes that the distribution of standard real estates within Seoul needs to be denser for more precise official price assessments.

According to industry sources on the 9th, Seoul recently launched an investigation into the adequacy of the distribution of standard land and standard houses, which serve as the basis for calculating individual real estate official prices. This is to raise the scale of Seoul’s standard real estates to an appropriate level and improve the distribution criteria, considering changes in the real estate and price disclosure environment.

Currently, Seoul has 29,152 standard land parcels. Based on this, the official land prices of approximately 887,000 individual parcels in Seoul are determined. The number of standard houses is about 21,716 units. The city believes that the distribution of standard real estates should be further expanded to ensure appropriate official price assessments. The government introduced the official land price system in 1990 to ensure price appropriateness in the land market, objectivity of land prices, and effectiveness of land policies. Since 2005, a housing price disclosure system that integrates land and buildings has been implemented. Official prices for land and detached houses are divided into prices for standard real estates and individual real estates (individual land and individual houses). Standard real estates are allocated by region, land use zone, building structure, etc., according to distribution criteria in the selection and management guidelines.

Controversies over the appropriateness of the official price realization rate have continued. In this regard, Park Won-soon, former Mayor of Seoul, emphasized that realizing official prices is an important means to recoup unearned income from real estate acquisition and ownership through taxation, and repeatedly stated that "official prices should be based on actual transaction prices."

The city views this investigation as necessary to increase the reflection rate of actual transaction prices in official prices. Since the current distribution criteria for standard real estates were redesigned in 2016, they have not reflected changes in the real estate environment, changes in land use zones and administrative districts, or price changes due to large-scale development projects, reconstruction, and redevelopment.

A Seoul city official said, "Recently, there have been changes in the market and policy environment related to price disclosure, such as rising land and housing prices and strengthened property taxes," adding, "To appropriately assess individual real estate prices, it is necessary to review the current scale and distribution of standard real estates and reasonably adjust the distribution criteria."

The city also holds the position that the number of standard land and standard houses in Seoul, a metropolitan area, should be expanded to promote smooth realization of official prices through differentiated evaluations by region and usage. To this end, the city plans to complete related research by the second half of this year and propose expansion plans for standard land and standard houses to the Ministry of Land, Infrastructure and Transport based on the results. However, the Board of Audit and Inspection has previously mentioned, based on research by the Korea Research Institute for Human Settlements, that if the current number of standard real estates is maintained, the number of standard real estates in metropolitan cities including Seoul should be reduced, so it is uncertain whether Seoul’s investigation and proposal will be accepted.

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