Nambu CC Golf Membership Most Expensive in Korea

As companies joined in the buying spree of golf club memberships, the tax standard increased an average of 11.6 percent from December last year.

On July 29, the National Tax Service (NTS) released the tax standard value of 277 memberships for 143 golf courses nationwide, to be applied as of August 1.

The tax standard value, used for calculating the capital gains tax, estate tax, and gift tax, is typically 90 percent of its market value and 95 percent for memberships over 500 million won.

The ascension of high-priced memberships was prominent, with memberships over 500 million won soaring 39.8 percent since last December when the prior precedent tax standard was announced.

Jeong Young-gak, the chief of golf business development team for Ace and Co., a golf membership trading company, said that 90 percent of the memberships over 500 million won were purchased by corporate customers.

The price of low-priced memberships below 50 million won rose a mere 5.9 percent, widening the price gap among memberships.

The market value of golf club memberships plunged when the government announced in June its plan to extensively develop golf courses last June, but rebounded this year as corporate demand soared.

According to the data, the golf course membership for Nambu CC is the most expensive at 950 million won, while Namchon CC gained the most value during the seven-month period, rising 66.2 percent.

Regional memberships for clubs located in Gyeonggi Province rose the most, 16.4 percent on average, while memberships for the Jeju region lost 2.9 percent as new golf courses were added.

The NTS, in the meantime, was surrounded by the speculation that it tried to cover up the increase. In its July 28 announcement, the NTS said that the tax standard value rose 0.1 percent on average, comparing the current data with August last year, instead of last December. The NTS had calculated the change in price using the most recent data.

Facing criticism, the NTS later discarded the data and released on July 29 the new calculation using data released in December of last year.

Analysts said that the NTS might have been under pressure from the increase of golf club memberships following soaring real estate prices in the Gangnam district.

Eun-Woo Lee libra@donga.com