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Five Cities and Districts Under Consideration for Get-tough Real Estate Measures

Five Cities and Districts Under Consideration for Get-tough Real Estate Measures

Posted May. 10, 2004 21:58,   


Five districts and cities, including the Yongsan district of Seoul, Kimpo city of Gwacheon, and Asan and Cheonan cities of South Chungchung province, have been newly designated as candidates for areas where reporting all residential real estate deals to regulators will be required.

Once designated as a report-obliged area, an acquisition tax is levied based on real transactions, not the standardized price set by the government, which will lead to a three- to six-fold increase in the tax.

An April housing price survey jointly conducted by Kookmin Bank and the Korea Appraisal Board showed on May 10 that the five districts and cities met the criteria for report-obliged areas. These areas saw at least one of the following: housing prices went up by 1.5 percent month-on-month; prices jumped as much as three percent in the past three months; the increase in housing prices is twice as much as the national average.

The Ministry of Construction and Transportation will finalize the decision on the new report-obliged areas at a policy review meeting on May 20.

The ministry will select candidates from areas where the repercussions of the policy will be bigger and where there is still an upward trend in prices.

In Yongsan district, where presales of City Park, a commercial and residential complex, have been heated, and in the city of Gwacheon, where the reconstruction of apartments is booming, are the two most likely candidates.

Meanwhile, the city of Kimpo, a March candidate that was not selected because housing prices there began to stabilize, is among the least likely areas that will be designated as a report-obliged area.

Kangdong and Songpa districts of Seoul and Bundang district of Seongnam have been singled out as report-obliged areas for the first time on April 26. In these areas, the purchase and sale of an apartment of 18 square meters or larger, and a multi-housing unit of 45 square meters or larger, should be reported to the district ward office within 15 days of the transaction. Otherwise, fines of as much as 10 percent of the housing price will be charged.

Joong-gu of Daejeon, Nam-gu of Ulsan and Uiwang city of Gyeonggido are currently under consideration for housing speculation areas where taxes on the transfer of ownership will be levied based on actual prices.

The government will hold a commission to stabilize real estate prices, chaired by a vice finance and economy minister, and designate housing speculation areas soon.

Kwang-Hyun Kim kkh@donga.com