Next Year’s Standard Detached House Official Price Rises 7.36%... Increase Rate Expands Again

2022 Standard Detached House and Standard Land Official Price Inquiry
Detached House Change Rate 4.47%→6.80%→7.36%
Standard Land Rises to Historic Highs Despite Being Lower Than Last Year
Ministry of Land Plans Measures to Ease Property Tax for Actual Buyers

▲Residential area along Usadan-ro, Hannam-dong, Yongsan-gu, Seoul, where high-end detached houses are located [Image source=Yonhap News]

The standard official price of single-family houses for next year is expected to rise by 7.36% compared to this year. This rate far exceeds the increases of this year (6.80%) and last year (4.47%). The official land price increase rate is also projected to rise to 10.16%, which, although slightly less than this year's 10.35%, is still at an all-time high level. Since the official prices are used to calculate property taxes, it is analyzed that the tax burden will become even heavier going forward.

The Ministry of Land, Infrastructure and Transport announced on the 22nd that it will disclose the official prices (draft) of 240,000 standard houses and the official land prices (draft) of approximately 540,000 standard land parcels as of January 1 next year, and will conduct a 20-day period for owners to review and provide opinions until January 11 next year.

The official prices of standard houses and standard land serve as the basis for each city, county, and district to calculate individual house prices and individual official land prices.

First, the change rate of the standard house official price (draft) for next year is 7.36% nationwide, which is an increase compared to last year's 6.80%. Except for 2019 (9.13%), this is the highest increase rate since the introduction of housing official prices in 2005. The government selected 240,000 houses out of 4.14 million single-family houses nationwide (including multi-family houses, multiple houses, and mixed-use houses) to announce the official prices.

By city and province, the increase rates are highest in Seoul at 10.56%, Busan at 8.96%, Jeju at 8.15%, and Daegu at 7.53%, while Gwangju (7.24%), Sejong (6.69%), and Jeonnam (5.86%) saw a decrease in change rates compared to the previous year.

By market price range, the change rate for standard houses priced below 900 million KRW is 5.06%, for houses priced between 900 million and 1.5 billion KRW it is 10.34%, and for houses priced above 1.5 billion KRW it is 12.02%.

By official price range, about 97.8% of all standard houses fall under the official price of 900 million KRW or less, which qualifies for the special property tax rate. The government is lowering the property tax rate by 0.05 percentage points per tax bracket for one-household-one-house owners with official prices of 900 million KRW or less.

With the amendment to the Comprehensive Real Estate Tax Act this year raising the basic deduction for one-household-one-house owners from an official price of 900 million KRW to 1.1 billion KRW, about 98.5% of all standard houses are expected to be excluded from next year's comprehensive real estate tax.

The realization rate of the standard house official price (draft) is 57.9%, which is 2.1 percentage points higher than 55.8% in 2021.

[Image source=Yonhap News]

The nationwide change rate of the standard land official price (draft) was found to be 10.16%. This is also the highest increase rate since 2007 (12.40%), except for last year's 10.35%.

The increase rates were highest in Seoul at 11.21%, Sejong at 10.76%, Daegu at 10.56%, and Busan at 10.40%. By usage type, residential land increased by 10.89%, commercial land by 9.60%, agricultural land by 9.32%, industrial land by 8.33%, and forest land by 7.99%.

The government selected and announced 540,000 parcels of land for official pricing next year, about 20,000 more than last year, out of 34.59 million parcels nationwide. The realization rate of the standard land official price (draft) is expected to rise to 71.4%, which is 3.0 percentage points higher than 68.4% in 2021.

Although the rapid increase in official prices every year following the 'Official Price Realization Plan' established last November has intensified public tax resistance, the government plans to proceed with the realization plan as scheduled.

However, next year, measures will be prepared to ensure that the burden of property tax and health insurance premiums does not increase for actual users who are one-household-one-house owners. Detailed implementation plans will be finalized and announced in March next year.

The standard land official price (draft) and the standard house official price (draft) will be finalized and announced on January 25 next year after hearing opinions from owners and local governments and review by the Central Real Estate Price Publicity Committee.

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