Concerns Over Tax Burden on Detached Houses

Disclosure of Official Prices for Individual Detached Houses

The appearance of a villa village in Seoul

The publicly announced prices of apartments and other multi-family housing surged by 19%, and the publicly announced prices of individual detached houses nationwide (individual house prices) are also expected to rise by about 7%, resulting in a massive tax burden for all homeowners.

According to the Ministry of Land, Infrastructure and Transport on the 19th, local governments across the country, including Seoul, disclosed the individual house prices that morning and began the public opinion collection process. The announcement covers 4.17 million units nationwide, including multi-family houses, multi-unit houses, and mixed-use houses.

The publicly announced prices of individual houses are expected to increase by an average of 7% nationwide and about 10% in Seoul. Individual house prices are determined by each local government based on the Ministry of Land’s standard detached house (standard house) publicly announced prices, comparing the characteristics and conditions of each individual house. Therefore, by looking at the standard house prices, one can estimate the individual house prices. Traditionally, local government heads have arbitrarily adjusted downward the rate of increase in house prices. However, since the government has set a policy to minimize this adjustment this year, it is highly likely that the increase in standard prices will directly translate into the rise in individual house prices.

The standard house publicly announced prices for 2021, announced by the Ministry of Land in December last year, showed a 6.68% increase compared to the previous year. In particular, Seoul saw an average increase of 10.13%, and high-priced houses over 1.5 billion KRW rose by 11.58%. The Ministry plans to raise the price realization rate to 90% over 7 to 15 years by price range, according to the standard house price realization roadmap.

Since detached house prices are also used as taxation data for local taxes such as property tax, acquisition tax, registration tax, and national taxes such as comprehensive real estate holding tax, an increase in the tax burden on owners is inevitable. Some local governments have opposed the central government’s sharp increase in publicly announced prices, fearing a sudden surge in residents’ tax burdens.

Seocho-gu in Seoul and Jeju-do proposed to the government on the 17th to freeze the housing publicly announced prices and conduct a full re-investigation. Jeju-do found 47 errors in the on-site verification of the publicly announced prices and claimed that vacant houses and abandoned houses were also included in the government’s investigation targets. It is estimated that 1,234 taxpayers either overpaid or underpaid property tax due to the distortion of publicly announced prices. Seocho-gu is concerned about the tax burden on residents due to the sharp rise in publicly announced prices. According to the district, housing publicly announced prices in the area rose by 13.53% this year, while property tax payments increased by 72% over three years.

Meanwhile, homeowners and stakeholders can view the individual house prices from today until July 7 on each local government’s website or at the tax department of the relevant district office, or at the eup/myeon/dong administrative welfare centers (civil service offices). Objections can be filed at the tax department of each district office. Afterward, through deliberations by the local government’s real estate price announcement committee, the final prices will be confirmed and announced on July 29.

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