Ministry of Land, Infrastructure and Transport to Promote Reassessment Study on Officially Announced Land Price Realization

[Asia Economy Reporter Ryu Tae-min] The government plans to initiate research to review the ‘Publicly Announced Price Realization Plan’ and prepare improvement measures for the public announcement system.

The Ministry of Land, Infrastructure and Transport announced on the 1st that it will begin the research service procedure for reviewing the Publicly Announced Price Realization Plan and preparing improvement measures for the public announcement system starting from the 2nd of next month. The review of the Publicly Announced Price Realization Plan will involve research services and public hearings, with revised and supplemented measures to be prepared by November this year and applied from the 2023 public announcement. Improvement measures for the overall public announcement system will be developed next year by synthesizing the research results and opinions from a separately operated expert advisory committee.

The Publicly Announced Price Realization Plan established in November 2020 aimed to restore fairness in the reflection rate (realization rate) of market prices for individual real estate properties, but issues were raised that the burden on the public increased during the plan’s implementation process.

Accordingly, the Ministry of Land, Infrastructure and Transport plans to analyze the implementation results regarding the target realization rate (90%) and the target achievement period (5 to 15 years) presented in the 2020 realization plan and prepare revised and supplemented measures. The current realization plan has been criticized for its high target realization rate and the significant impact on tax and welfare systems due to the sharp rise in publicly announced prices over the past two years.

The Ministry will reconsider the appropriateness of the current target realization rate by taking into account the concept of appropriate pricing and overseas cases, and will also review the appropriate period for achieving the target by considering the restoration of balance in realization rates among individual properties and the level of public burden.

Furthermore, the Ministry plans to examine whether to introduce a flexible adjustment mechanism (including detailed requirements and procedures) that temporarily suspends the application of the plan in case of external shocks such as economic crises or rapid real estate price surges. In addition, the Ministry will review the possibility of applying different price standards to administrative systems that utilize publicly announced prices, along with the nature of the publicly announced prices separately calculated by the government.

The Ministry also stated that it will review and promote various improvement measures recently proposed by local governments and experts regarding the accuracy and reliability of publicly announced prices.

Lee Rang, Director of the Real Estate Appraisal Division at the Ministry of Land, Infrastructure and Transport, said, “Through this research service and the expert advisory committee, we will prepare reasonable improvement measures to minimize the public burden under the realization plan while ensuring that the public announcement system can be trusted by the public.”

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