Average Standard Value Will Increases by 47.06 Million Won

The standard value of 441 apartment complexes in Seoul metropolitan area will be adjusted to around 90 % of market value by increasing 17.1%. In the areas, the price of apartments has been skyrocketing continuously.

Additionally, among the real estate booming districts in Seoul and Kyunggi-do designated by Ministry of Construction & Transportation, 145,000 units of apartment valued more than 300 million won by standard value should pay property tax increased by 23-50% from the next year.

National Tax Service (NTS) announced on 12th that NTS would adjust standard value for apartment and unit housing frequently, and increased standard value with lightening speed for 309,461 units of 441 sites in Seoul and metropolitan area.

Increased standard value will be enforced from 13th and the transaction having paid residual payment or completed conveyance by 12th will be applied for the previous standard value.

The south of Han River, so 335 sites in Kangnam are included. Particularly, apartments in Kangnam, Secho, Songpa and Kangdong share 64.4% (284 sites). In Kangbuk and metropolitan area, 50 sites and 56 sites are included respectively.

By the announcement of NTS, for one unit of the relevant apartment, the standard value increased by 47.06 million won. Especially, in big 3 of Seoul; Kangnam, Secho and Songpa, the apartment under the redevelopment plan increased in price by 67.5 million won.

Therefore, the owners of the relevant apartment should pay more than ten million won additionally as property tax when selling the apartments. Ministry of Government Administration & Home Affairs announced the detail guideline of imposing increased property tax after opening meeting of public officers of local government concerned tax.

According to the guideline of Ministry of Government Administration & Home Affairs, apartment valued between 300 million and 400 million won in standard value should pay 9% in the next year from 2 % in this year and 12% in 2006.

Apartment valued between 400 million won and 500 million won in standard value should pay 15% in the next year from 5% in this year and 25% in 2006. The apartment more than 500 million in standard value should pay 25% in the next year from 10% in this year and 40% in 2006.

Ministry of Government Administration & Home Affairs also consider alternative to increase the rate 25% in the next year and 40% in 2006 if the increased tax doesn’t have effects.

Ministry of Government Administration & Home Affairs also endows discretion to the head of local government to increase the tax rate to 50% at maximum when real estate is in fever.

Ki-Dae Yang Jeong-Hun Park kee@donga.com sunshade@donga.com