Standard Market Price for Gangnam Apartments will be Raised in the Second Half of this Year

It is expected that the standard market price for areas such as Gangnam, Bundang in Seongnam, and Yong-in, whose apartment prices have surged, will be adjusted upwardly in the second half of this year. When the standard market price increases, all taxes related to real estate such as acquisition registration tax, inheritance tax, capital transfer tax, capital gains tax and the property tax will increase accordingly as well. In addition, the National Tax Service will undertake a large-scale tax investigation on all areas whose real estate prices have grossly increased beginning early next week.

At a regular briefing held at the Gwacheon Government Complex on June 10, Han Duck-soo, the Vice Minister and the Minister of Finance and Economy said, “The apartment prices in Gangnam, Seoul and Pangyo in Seongnam, Gyeonggi have been skyrocketing, and the standard market prices of these areas should be readjusted to reflect the real transaction price.” Han further declared, “A big expert team from the National Tax Service should be deployed to the areas where real estate prices have increased greatly to assess the real transaction price, and if necessary, we will set up a special team.” The standard market prices that the National Tax Service announced on May 2 do not reflect the real transaction price since they were assessed based on January 1 figures. Minister of Construction and Transportation Choo Byung-jik said on the same day, “The government will continue to build new cities whose residential environment is as good as that of Gangnam and Pangyo.”

Chi-YoungShin Eun-Woo Lee higgledy@donga.com libra@donga.com