"Almost 50% Increase, Thought I Misread the Number" Seoul Apartment Owners Stirred by Official Price Hike

Official Apartment Price Disclosure Begins on March 18

As of March 18, viewing of the official public housing prices for multi-unit residences has begun, and negative sentiment is emerging, particularly in real estate communities in areas where home prices have risen significantly. This is due to concerns about an increased property tax burden.

After the announcement by the Ministry of Land, Infrastructure and Transport on the previous day, many apartment owners began sharing the results of their public housing price searches from midnight. One community in Seoul shared comments such as, "It went up almost 50%. I thought I misread the numbers," and "It rose as much as the amount I paid for the apartment two years ago," highlighting that the increases were much higher than expected.

Eterno Cheongdam in Gangnam-gu, Seoul, recorded the highest official price for apartment complexes this year. Photo by Yonhap News

According to the Ministry of Land, Infrastructure and Transport, this year’s official public housing prices for apartments in Seoul have risen by 18.67% compared to last year. In particular, the three Gangnam districts, Yongsan-gu, Seongdong-gu, and Mapo-gu—areas that led last year’s home price increases—recorded growth rates in the 20% range. Official apartment prices are calculated based on a variety of factors, including actual transaction prices over the past two years, asking prices, appraisal values, view, noise, and local living infrastructure, all of which affect pricing.

Despite the increase in home prices, the reactions have been largely negative. This is because the higher home values will immediately become the new basis for taxation, making it certain that tax burdens will rise. Among residents of newly constructed apartments in Cheongnyangni, Dongdaemun-gu, and Gangdong-gu, Seoul, reactions included, "Until last year I only paid property tax, but now I will have to pay the comprehensive real estate tax as well," and, "The 1.2 billion won threshold is too low."

In Dongdaemun-gu, there were only 8 multi-unit residences exceeding the 1.2 billion won threshold for the comprehensive real estate tax deduction last year, but this has increased to 1,205 this year. In Gangdong-gu, where large apartment complexes are concentrated, the number jumped from 3,167 to 19,529, an increase of more than six times.

In particular, the higher the property value, the greater the increase in official prices, making tax calculations even more complicated for homeowners in these areas. According to the Ministry of Land, Infrastructure and Transport, official prices for apartments valued between 1.2 and 1.5 billion won rose by about 25% compared to last year; for those valued between 1.5 and 3 billion won, the increase was 27%; and for properties exceeding 3 billion won, the increase was about 29%.

A notice about property tax posted at a real estate agency in Jamsil, Songpa-gu, Seoul. Yonhap News Agency

Some also point out that, relative to the increase in home prices, the tax burden remains low. According to simulation data commissioned by The Asia Business Daily from Byungtak Woo, Premier Pathfinder Specialist at Shinhan Bank, the official price for a hypothetical owner of three apartments in Gangnam-gu (Acro River Park 112m², Eunma 84m², and Jamsil Jugong 5 82m²) rose from 8.7 billion won last year to 10.8 billion won this year, an increase of about 2.1 billion won. In this case, the property tax rises from 135.52 million won to 192.04 million won, an increase of about 56 million won. Although the tax burden has risen significantly in percentage terms, the increase is extremely small compared to the rise in home prices.

The government also expects that, given the large increases this time, there will be a considerable number of objections filed. If there are concerns about the official prices, submissions can be made through the designated website, local governments, or the Korea Real Estate Board by April 6. A representative from the Ministry of Land, Infrastructure and Transport stated, "In the past, such as in 2007 and 2021 when the increases were substantial, there was a tendency for the number of objections to rise compared to other years."

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