"Stop the Increase in Official Real Estate Prices" People Power Party Proposes Consecutive Bills

[Image source=Yonhap News]

[Asia Economy Reporter Park Cheol-eung] Members of the People Power Party are consecutively proposing bills to prevent the sharp increase in real estate official prices.

On the 31st, Kim Eun-hye, a member of the People Power Party, announced that she has proposed an amendment to the Real Estate Price Official Announcement Act that requires the government to disclose the calculation formula when setting official prices and to establish a market price reflection rate plan with the consent of the National Assembly.

Real estate official prices are used as the basis for over 60 types of taxes and quasi-taxes, including property tax, comprehensive real estate tax, health insurance premiums, and basic pensions, but the measurement formula is not disclosed.

Lawmaker Kim explained the background of the bill proposal, saying, "While official prices are calculated in the dark, citizens are facing a tax bomb without knowing the reason." The intention is to disclose the formula and verify its appropriateness.

The government announced last month a plan to raise the official price realization rate by 3 percentage points annually, aiming to reach 90% of the market price over 10 to 15 years. The bill also includes a provision that the National Assembly must consent when such plans are made in the future.

Kim argued, "Article 59 of the Constitution states that 'the items and rates of taxation shall be determined by law,' yet official prices have been arbitrarily calculated by the executive branch, not the legislative branch that enacts laws, and used as a means of indirect taxation, leading to constitutional controversy."

There is also a bill that prohibits raising official prices beyond a certain limit. The amendment proposed by Park Seong-jung of the People Power Party on the 21st stipulates that the increase rate of official prices compared to the previous year cannot exceed 10%. It also proposes that the total increase rate over the past five years compared to the previous year should not exceed 30% by law.

Park cited the example of the United States, saying, "Local governments announce the assessed value of real estate, and in the case of New York City, except for value increases due to new construction or repairs, the increase cannot exceed 6% per year or 20% over five years."

He also criticized the government's realization plan, arguing, "It results in so-called ‘tax bomb’ punitive taxation not only for elderly or retirees without income but also for the majority of citizens, including single-home households."

The Ministry of Land, Infrastructure and Transport announced on the 24th that the nationwide standard land official price proposal for next year increased by 10.3% compared to this year. Standard land serves as the basis for calculating individual official prices, which cover 33.46 million parcels.

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