This Year Again 'Jongbuse Tax Bomb'... Aripak 43 Million KRW, Jamsil Jugong 12 Million KRW

Top 10 Domestic Apartments' Property Tax Surpasses 100 Million Won
Property Tax Burden Decreases Year-on-Year for Properties Under 600 Million Won

On November 27 last year, a notice regarding tax consultations such as property tax and comprehensive real estate tax was posted at a real estate agency in Songpa-gu, Seoul. [Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] This year, with the sharp rise in publicly announced prices of apartment complexes, the burden of holding taxes (property tax + comprehensive real estate tax) is expected to increase significantly, especially for high-priced apartments in Seoul. Not only in the Gangnam area but also in the Gangbuk area, where housing prices rose sharply last year, taxes are expected to surge. However, single-homeowners with publicly announced prices below 600 million KRW will see a reduced holding tax burden compared to last year due to the newly established special property tax rate applied this year.

According to the Ministry of Land, Infrastructure and Transport on the 15th, the nationwide average increase rate of publicly announced apartment complex prices this year was 19.08%. In terms of the increase rate, this is the largest in 14 years since 2007’s 22.7%. Seoul’s prices rose by 19.91% compared to last year, approaching a 20% increase rate.

Based on a holding tax calculation requested from Woo Byungtak, head of Shinhan Bank’s Real Estate Investment Advisory Center, the holding tax for Acro River Park in Banpo-dong, Seocho-gu, Seoul, with an exclusive area of 112.96㎡, is expected to surge by 59.6% (16.26 million KRW), from 27.26 million KRW last year to 43.52 million KRW this year. This simulation assumes the apartment owner is 59 years old, has held the property for less than 5 years, and does not receive any tax deductions for single-homeowners.

The holding tax burden for Raemian Daechi Palace in Daechi-dong, Gangnam-gu, with an exclusive area of 84.97㎡, whose publicly announced price rises from 2.072 billion KRW last year to 2.36125 billion KRW this year, nearly doubles from 10.18 million KRW to 19.91 million KRW (an increase of 9.73 million KRW). Property tax only increased by 30.1% (1.12 million KRW), but the comprehensive real estate tax rose sharply from 3.39 million KRW to 10.1 million KRW, a 197.9% increase (6.71 million KRW), which had a major impact.

For Jamsil Jugong Complex 5 in Songpa-gu, with an area of 82.61㎡, the publicly announced price rose from 1.65 billion KRW to 1.96713 billion KRW, causing the holding tax to increase by 50.0% (4.18 million KRW), from 8.38 million KRW to 12.56 million KRW. A resident of this complex said, "The holding tax, which was 3 to 4 million KRW just a few years ago, has risen to 12 million KRW," adding, "I don’t know if this is a normal rate of increase."

The Penthouse Cheongdam in Cheongdam-dong, Gangnam-gu, which was completed last year and became the most expensive apartment complex in Korea this year with an area of 407.71㎡, is estimated to have a holding tax of 409.53 million KRW to be paid for the first time this year. Since the publicly announced price reaches 16.32 billion KRW, the holding tax approaches the price of a typical apartment. Among the holding taxes, property tax accounts for 38.54 million KRW, and comprehensive real estate tax accounts for 291.31 million KRW. Additionally, the holding taxes for the top 10 apartments in Korea, including Hannam The Hill and Traumhaus 5th phase, all exceeded 100 million KRW.

However, single-homeowners holding apartments with publicly announced prices below 600 million KRW will see a reduction in holding tax burden according to the revised Local Tax Act at the end of last year. For an apartment with a current market price of about 860 million KRW, the publicly announced price this year is 600 million KRW, which is a 30.4% increase from last year’s 460 million KRW, but the holding tax decreases by 8.2% (82,000 KRW) from 1.017 million KRW to 934,000 KRW during the same period.

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