Possession Tax of Metropolitan Area’s 20 Pyong Apartments Also Increases

When the possession tax system modification bill takes effect next year, high-priced apartments in Gangnam and mid- to low-priced apartments of around 20 pyong in size in the metropolitan area will experience higher tax payments.

Following this, the wealthy people of Gangnam and the low income people of the metropolitan area’s resistance to the new system are anticipated.

According to research done on this year’s possession tax (property tax and general real estate tax) and next year’s expected total property tax by Dong-A Ilbo yesterday, out of 10 mid-to-small sized and mid-to-low priced apartment areas in Gwanak, Guro, Dobong, Seoul and Gunpo, Gyeonggi Province, eight will see a higher tax payment next year.

Among the eight, three regions’ increased rates are so large that they will be affected by the “50 percent limit system,” a system which limits the tax increase to lower than 50 percent compared to the year before.

Park, who lives in a 24-pyong Daelim apartment in Shindorim-dong, Guro-gu, Seoul, priced at 150 million won (tax standard value), paid 78,030 won in real estate possession tax (property tax 47,220 won and general real estate tax 30,810 won).

However, his possession tax will rise to 165,000 won next year. Although he only pays 117,045 won due to the 50 percent maximum limit, he will pay 165,000 won starting from 2006.

Kim, living in 15-pyong Shinlim Hyundai apartment, Shinlim-dong, Gwanak-gu, Seoul, priced at 85.5 million won (tax standard value), paid 43,390 won as possession tax this year, but this figure will rise to 68,250 won next year.

For the moment, he is paying 65,085 won due to the maximum limit system, but from 2006, he will pay 68,250 won.

On top of this, other taxes such as the city planning tax, public facility tax, and local education tax (20 percent of property tax), which are levied with property tax, are expected to rise, resulting in a much higher tax payment.

For the city planning tax, the tax rate decreased from 0.2 to 0.15 percent, however, the taxation standard (standard for levying tax, for property tax, it is 50 percent of the standard market price) has increased by so much that the tax payment has actually increased.

Jong sik Kong Chi-Young Shin kong@donga.com higgledy@donga.com