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Taxation Prices of Apartments Up 6.7 Percent

Posted April. 28, 2004 20:50,   


The average taxation price of 5.42 million housing units such as apartments and multi-unit houses nation-wide rose by 6.7 percent or 8.74 million won.

Incheon and Daejon, the two cities where new real-estate development was booming, lead the gain with 15.2 percent (10.47 million won) and 14 percent (13.41 million won) respectively. In terms of increased amounts, Seoul leads the pack with 20.33 million won.

The increase in taxation prices will lead to an increase in estate and ownership transfer taxes, which in turn will put a crimp in the housing market.

The Office of National Taxation Administration announced the taxation prices of 5,423,000 housing units in 21,321 compounds nationwide and applies them to levy estate and ownership transfer taxes.

The taxation price is the gauge the government uses to levy sales and estate taxes in real-estate dealings. The higher the price, the higher the taxes become.

The ownership transfer tax is already levied based on market value in what they call housing speculation areas such as Seoul, and the current readjustment won’t affect it much. However, the government will use the new taxation price as data to determine whether taxpayers reported their transfer taxes in good faith.

This year’s increase of 6.7 percent is lower than last year’s 15.1 percent.

However, given the spate of price stabilization measures the government has adopted, this year’s increase rate showed that another hike in real estate prices is possible.

Incheon, where a new international airport and a new highway have opened and where new housing compounds are undergoing construction, and Daejon, the strongest candidate for a new executive capital, posted the largest increase.

As for small cities and counties, Gwangmyong, where a bullet train station exists, rose by 29.1 percent. Pyongtaek, the candidate for a new U.S. military base where the construction of many housing compounds is underway, posted a 27 percent gain. The Euseong district of Daejon, a possible site for an executive capital, registered 26.6 percent and the West district 23.4 percent.

In Seoul, the Seongdong district, where reconstruction is booming, gained by 17 percent. The Jongro and Central districts rose 18.3 percent and 15.2 percent respectively.

As for apartment complexes, the 108 square-meter unit at Trarium House in Seoul posted the biggest taxation price of 3.24 billion won. As for multi-unit houses, the 230-square-meter unit at Trarium House registered 3.69 billion won.

The 102-square-meter unit at Tower Palace in Seoul posted the largest increase of 900 million won. Its taxation price tag is 2.7 billion won.

The government will readjust the taxation price in such regions as the south of Seoul, where market prices go up rapidly

As for the midsized and small housing units which often change hands without affecting the calculations of taxation prices, the government will use a market value table to increase their taxation prices.

The new taxation prices are available for view at the National Office of Taxation Administration’s Web site at www.nts.go.kr.

Ji-Wan Cha cha@donga.com