Real Estate Brokers Face to Face With NTS

The government is being denounced by the construction and real estate industries for its excessive real estate policies aimed at stabilizing house prices.

The real estate industry especially criticized the excessive investigation activities of the National Tax Service as “non-democratic and illegal” and voiced their strong opinions concerning recent articles released by government institutions reporting that house prices started dropping.

Controversy over human rights violations

It was confirmed on June 13 that the National Tax Service took lists of subscribers for a new apartment complex project at Suwon`s “Royal Palace”.

“The NTSs came to ask for the list to look into possible real estate speculators,” said a representative at Shinyoung Construction Company. “We had to give it to them.”

So far, the NTS has argued that it has been collecting information on only those who subscribed to more than three apartment complexes.

Law experts point out that these activities are major violations against human rights. A lawyer at Eulji law firm Cha Hung-kwan said, “There will be no problem if the NTS investigates against those who would not pay for a legal transfer tax after selling their apartment subscription rights. However, if the NTS goes for all people who applied for those apartments, that would be against the law.”

Controversy over appropriateness of tax investigation

Korea Real Estate Brokers Association (KREBA) decided to release real estate speculation cases conducted by high government officials in the near future, and placed its statement in four major daily newspapers including Donga to protest the inappropriateness of the NTS tax investigation.

In the statement, KREBA denounced the NTS as “continuing with non-democratic and illegal investigations indiscriminately by ransacking real estate agencies and cars as well as copying customer information from computers.”

Dispute over the fall in housing prices

The real estate industry argues that the reporting of “lowered apartment prices” by NTS is unreliable.

The NTS announced through its recent trend analysis that premium subscription rights dropped by 8.7 percent compared to the 23rd of last month. It also said that reconstruction and regular apartment prices fell by 2.8 percent and 2.4 percent, respectively, during the same period.

It also said that out of 18 apartments located in Seoul, Gyeonggi and Chungcheong Province, 14 lowered prices while 2 remained the same and another 2 increased.

However, real estate business circles state that this information is totally “wrong”.

It argues that apartment prices in most areas remained the same or rather went up although those in non-popular areas went down. A survey conducted by a real estate information collection agency showed a significant difference from NTS material: 13 remained the same while four places went up out of the same 18 places. For the remaining one place, the NTS wrongly announced it as being located in Jamsil instead of Dunchon. “Shingsung Eunhasoo” Apartments in Dunchon have kept the same prices since mid-April.

Ji-Wan Cha cha@donga.com