Another Tax Probe in Kangbook Area and in the Capital`s Satellite Towns If the Housing Price Skyrockets

The Government decided to enlarge the investigation on speculative investments carried out in Kangnam area, Seoul to Kangbook area and the capital`s satellite towns this week. The Government plans to carry out a tax probe or adjust the official fixed price promptly if there is a skyrocketing price phenomenon.

On the 15th, the Ministry of Finance and Economy planned to enlarge the range of ` Measures for the stabilization of real estate on the 1st of January` including the tax probe and the prompt adjustment of the official fixed price when there is a sign that the disguised demand for real estate in Kangnam area is spreading to the Kangbook area and to the capital`s satellite towns.

During this week, through the Ministry of Construction and Transportation (MCT) and the National Tax Service (NTS), the Ministry of Finance and Economy (MFE) will investigate the housing price trend of the areas congested with apartments in Kangbook area including Dongbuichon-dong, Sanggye-dong, and Mapo-ku, and the area around reputable high schools such as Seo-hyun High school in Bundang and Paek-seuk High school in Ilsan in the capital`s satellite towns. The MFE also plans to intensify the tax probe and the collection of the data from the NTS about the false realty-transfer tax reporters in this area.

Meanwhile, after the `Measures on the 8th of January`, a so-called `broker` disappeared according to the investigation on the real estate transactions trend in Kangnam area by MCT and NTS. And it also showed that most of the real estate agencies in the skyrocketing areas such as the one around the apartments in Dogok-dong, Kangnam-ku and some parts of Daechi-dong closed their doors and had almost stopped conducting apartments and parcel-out rights transactions.

Hur Yong-sok, the director of the ministry`s Property Tax Division, explained, "In the areas under investigation, the actual price of apartment transactions fell a little bit or remained steady. The prices have fallen by a rate of 5 million won to 30 million won and the skyrocketing price of the apartments has settled down."

Joong-Hyun Park sanjuck@donga.com