Designated House Trade Declaration Areas

Yongsan and Gwacheon were both newly added to the list of residence trade declaration areas where acquisition taxes and registration taxes are applied by the market price.

These areas, from this Friday, will have to declare real transaction details within fifteen days of the contract day whenever apartments are traded. Acquisition and registration taxes will increase by three to five times more than the current tax.

There are six residence trade declaration areas including Gangnam, Gangdong, Songpa in Seoul and Bundang in Gyeonggi, which were announced last month on the 21st.

The Ministry of Construction and Transportation (MOCT) announced yesterday that they are designating Yongsan and Gwacheon, areas that led the recent short period house price jump, out of five contestants as residence trade declaration areas.

Kimpo, Cheonan and Asan, which were candidates for being named declaration areas along with Yongsan and Gwacheon, were left out due to their recent house price stability and their low spreading effect.

Park Sang-woo of MOCT said, “Although we designated additional declaration areas, there will be no countryside areas included for a while to prevent house market stagnation.”

Houses that have to be reported are those with more than sixty square meters of private area. Semidetached, detached, multi-residence houses will not have to report.

On the other hand, reconstructed houses, if they received construction confirmation or are designated as reconstruction area houses, have to report whatever their private use area is.

--Acquisition and registration tax increases for the declaration area.

Yongsan’s LG Han River Xi’s taxes will increase from 18,560,000 to 81,200,000 won (4.37 times more).

The MOCT refused Songpa’s request to disengage Poognap from the declaration area due to the reason that there are still resources accounting for house price instability.

Meanwhile, the government announced that it is planning on opening a real estate price stability agenda meeting today with the Ministry of Finance and Economy’s Kim Kwang-lim to discuss the issue of designating nine places, including Euiwang, as house and earth speculation areas.

Eun-Woo Lee libra@donga.com