Seoul Kangnam Jumps As Much As Seven Times

Starting next year, property taxes on apartments in Seoul’s Kangnam area will more than double with some apartments facing a jump of as much as seven times their current tax rate.

Additionally, with the exception of apartments over 60~70 pyong (1 pyong = 3.3058 m²), the property tax in the Seoul Kangbuk, Inchon, Kyeongi Province and other metropolitan areas will rise approximately 20 percent.

Protests from those living in the affected areas are expected.

Minister Huh Sung-kwan of the Ministry of Government Administration and Home Affairs (MOGAHA) announced the tax increases yesterday as part of the report “Innovations in the Tax Base for 2004 Apartment House Property Tax.”

The plan’s major change is the method of selecting the tax base for levying property tax on apartment houses. The current method estimates the rate by the area, while the new system will estimate the rate based on the current price according to the National Tax Service’s standard value.

According to the newly announced plans, apartments which have a standard value below 750,000 won per m² will be taxed at as much as 20 percent less than current rates, while taxes on apartments over 7 million won may be as much as doubled.

The standard price per m², which is the base when estimating an apartment’s tax base, will be raised from the current 170,000 won to 180,000 won.

The property tax of a Seoul Kangnam-gu Daechi-dong 38 pyong apartment will go from the current 126,000 won to 926,000 won, an increase of 7.35 times, while the property tax of a Seoul Songpa-gu Chamsil-dong 52 pyong apartment will increase 5.29 times, from the current 204,000 won to 1,080,000 won.

On the other hand, the taxes on a Kyeongi Province Kimpo City Changki-dong 77 pyong apartments will decrease by 31 percent, from its current 1,170,000 won to 800,000 won, and a Yongin City Shinbong-dong 82 pyong apartment will decrease 21 percent, from its current 1,580,000 won to 1,230,000 won.

Based on this new system, 73.7 percent of the nation’s 6.97 million apartment houses, or some 5.14 million houses, will face increased property taxes.

MOGAHA explained that property tax revenues will increase approximately 1,011 billion won (10.8 percent), from this year’s 9,336 billion won to 1.0347 trillion won next year.

Detached houses’ taxes will be determined via the current method for their area, but the standard price per m² of commercial use buildings will be raised just as it has been for apartments, from 170,000 won to 180,000 won.

MOGAHA is planning to hold a regional hearing on the new tax base plan, to collect public opinion and discuss the issue with the local governments. The final plan will be confirmed this month with MOGAHA planning to advise local governments to accept this final confirmation.