Standard Housing Official Price Decline... 1.9 Billion Won Detached House Property Tax 9.28 Million → 6.66 Million

Standard Detached House Official Price Reduced by 5.95%
Double-Digit Decline Expected for Apartment Official Prices in March

[Asia Economy Reporter Kim Min-young] For those owning a single detached house with a publicly announced price of around 1.9 billion KRW, the holding tax burden is expected to decrease by about 2.6 million KRW compared to last year. In particular, as the publicly announced prices of high-priced houses with relatively higher realization rates have significantly dropped, the holding tax burden is expected to decrease more than that of mid- to low-priced houses.

[Image source=Yonhap News]

On the 25th, Asia Economy conducted a simulation commissioned to Woo Byung-tak, team leader of Shinhan Bank WM Business Division. According to the simulation, the publicly announced price of a detached house with an actual transaction price of 1.7 billion KRW as of November 2022 will decrease from 1.4352 billion KRW in 2022 to 1.2801 billion KRW this year. Accordingly, the holding tax for a single homeowner owning this house is expected to decrease by about 600,000 KRW (26.8%), from 3.723 million KRW in 2022 to 3.125 million KRW in 2023.

If one owns a single detached house in Bangbae-dong, Seocho-gu, Seoul, with a publicly announced price of about 1.9 billion KRW, the holding tax will decrease by approximately 2.62 million KRW, from 9.28 million KRW in 2022 to 6.66 million KRW this year. For a single homeowner owning a house in Galwol-dong, Yongsan-gu, with a publicly announced price of about 1.3 billion KRW, the holding tax paid last year was 4.6 million KRW, but this year it will decrease by about 27% to 3.34 million KRW.

This figure was calculated by applying the prices of 250,000 standard houses disclosed by the Ministry of Land, Infrastructure and Transport on the same day, based on a simulation assuming no tax credit for single homeowners.

The reduction in holding tax is even greater for high-priced houses. This is because the government lowered the publicly announced prices to the 2020 level, resulting in the realization rate of standard house publicly announced prices dropping to 53.5% this year.

Among detached houses, the residence of Lee Myung-hee, chairwoman of Shinsegae, in Hannam-dong, Yongsan-gu, Seoul, maintained the top spot for publicly announced price for eight consecutive years. The publicly announced price of her residence this year is 28.03 billion KRW, down 9.9% from 31.1 billion KRW in 2022. Accordingly, the holding tax for a single homeowner is estimated to have decreased from 553 million KRW last year to 436 million KRW this year. However, the actual holding tax paid may differ depending on the holding period, number of houses owned, deduction rates, and other factors.

The second place is the residence of Lee Hae-wook, chairman of DL Group, in Samseong-dong, Gangnam-gu (total floor area 2,617.4㎡), with a new publicly announced price of 18.2 billion KRW, down 11.6% from 2022. Assuming a single homeowner, the holding tax for this house is estimated to have decreased by about 80 million KRW from the previous year to 233 million KRW.

Meanwhile, in the market, with the continued decline in housing prices since last year combined with the effect of lowering the realization rate, the publicly announced prices of Seoul apartments to be announced in March are expected to record an even larger double-digit decline than this.

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