Effect of Official Price Freeze?…350 Million KRW Reduction in Property Tax for Gangnam Banpo Xi Owners

How Much Will My Property Tax Decrease?

Banpo Jaei This Year: 17.18 Million KRW

Applying This Year’s Officially Announced Price Would Mean 20.63 Million KRW

[Asia Economy Reporters Minyoung Kim, Taemin Ryu] The current government’s plan to ease the property tax burden is a temporary measure effective for only one year. Separately, if housing prices continue to rise as they are now, there is concern that the property tax burden could suddenly surge after next year. This is because the increase in officially announced prices, which was not applied this year, will accumulate and be used in future property tax calculations. Experts say that to dispel fears of a tax bomb, the government should also consider reviewing the roadmap for the realization rate of officially announced prices that it is currently promoting.

On the 23rd, Asia Economy commissioned Woobyeongtak, Head of Real Estate Team at Shinhan Bank WM Consulting Center, to analyze the changes in property tax due to the freeze of officially announced prices for major apartments leading the Seoul Gangnam and Gangbuk markets (based on one household, one house). For Banpo Jaei 84㎡ in Gangnam, Seoul, with last year’s officially announced price at 1.248 billion KRW, this year’s property tax is 17,185,800 KRW, an increase of 659,520 KRW from last year. If the increase in officially announced prices this year were applied as is, the tax would be 20.63 million KRW, so it is clear that the burden has significantly decreased.

The property tax for Jamsil Jugong 5 Complex 110㎡, a reconstruction complex in Songpa, is also 11,257,440 KRW this year, up 435,456 KRW from a year ago. If the officially announced price increase this year were applied, the tax would be 13.7 million KRW. For Mapo Raemian Prugio 114㎡, the leader in Gangbuk, the freeze effect means the original property tax of 8.97 million KRW is reduced to 6,865,080 KRW, an increase of only 319,956 KRW from last year. The property tax for Raemian Godeok Hillstate 84㎡ rises from 2,996,265 KRW to 3,282,000 KRW, an increase of 283,935 KRW. The original amount to be paid was 4.19 million KRW. However, since the government’s announced property tax relief measures are not yet finalized, it is still difficult to predict the actual taxes these apartment owners will pay.

The problem lies in next year’s situation when this year’s increase will be cumulatively reflected. Woobyeongtak said, “This plan is a temporary measure implemented for one year, so property taxes could jump in a stepwise manner after next year,” and added, “To prevent a sharp increase in property tax burden in the future, buffer measures such as a gradual rise in the fair market value ratio should be prepared quickly.”

Experts say that unless the government reviews the roadmap for the realization rate of officially announced prices, the property tax burden will inevitably continue to grow if current housing price levels are maintained. Since the realization rate of officially announced prices rises every year, property taxes will inevitably keep increasing.

Lee Eunhyung, Senior Researcher at the Korea Institute of Construction Policy, said, “We need to closely watch the fact that officially announced prices rose by as much as 17% this year.”

Seo Jinhyung, President of the Korea Real Estate Society, said, “This temporary tax relief measure is meaningful in that it dilutes the perception of a tax bomb in the market,” but added, “However, the policy must instill the perception that it will be maintained in the future to secure trust in tax policy.”

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