Official Land Price Increased by 17%... Property Tax Remains at Last Year's Level

Ministry of Land, Infrastructure and Transport Freezes Official Property Prices for 1-Homeowners to Reduce Tax Burden
Yoon Administration Preparing Additional Tax Cut Measures, Situation Remains Fluid

Apgujeong Hyundai Apartment_Real Estate Reference Photo / Photo by Hyunmin Kim kimhyun81@

[Asia Economy reporters Kangwook Cho and Minyoung Kim] The official prices of apartments and other multi-family housing nationwide will rise by more than 17% this year compared to last year. This marks a double-digit increase in official prices for the second consecutive year. However, to ease the burden of a sharp increase in taxes for single-homeowners, the government has decided to apply last year's official prices when calculating this year's property tax. As a result, property tax and comprehensive real estate tax are expected to remain frozen at last year's levels. Nonetheless, since the Yoon Seok-yeol administration is preparing additional tax reduction measures separately, the final amount of property tax homeowners will have to pay this year remains fluid.

On the 23rd, the Ministry of Land, Infrastructure and Transport announced the official price plan for 14.54 million multi-family housing units as of January 1 this year and stated that the owner review and opinion hearing process will be conducted from the 24th of this month to the 12th of next month. The nationwide official price change rate for multi-family housing this year was set at 17.22%, which is 1.83 percentage points lower than last year's change rate of 19.05%. Accordingly, the official price realization rate recorded 71.5%, up 1.3 percentage points from last year's 70.2%.

By region, Seoul's official prices will rise by 14.22%. Official prices in areas where housing prices rose significantly last year, such as Incheon (29.33%), Gyeonggi (23.20%), Chungbuk (19.50%), and Busan (18.31%), will also increase substantially. On the other hand, Sejong will see a decrease of -4.57%. The government will calculate property taxes based on this, so homeowners in regions with large official price increases will face significantly higher tax burdens. However, about two months before the presidential election last December, the government decided to prepare measures to ease the tax burden on single-homeowners and announced the plan on the same day. The plan applies last year's official prices when calculating this year's property tax base for all single-homeowners. Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, chaired a meeting of related ministers to review the real estate market at the Government Seoul Office and said, "We have prepared detailed measures to prevent increases in burdens such as property tax and health insurance premiums," adding, "Therefore, despite the rise in official prices, property tax will not increase compared to last year."

The plan does not include lowering the 'Fair Market Value Ratio,' another factor that determines property tax. The Fair Market Value Ratio is the rate multiplied by the official price to determine the tax base for taxation. Lowering this ratio can reduce tax burdens, but since President-elect Yoon Seok-yeol pledged during his candidacy to lower the current 95% ratio to 80%, the final plan is expected to be decided through coordination between the government and the transition team.

Additionally, the government has decided to defer comprehensive real estate tax payments for elderly taxpayers with insufficient payment capacity and to raise the basic deduction limit from property when calculating health insurance premiums to 50 million KRW.

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