Property Tax for Apartments Could Triple for Some Homeowners

The declared value of apartment houses this year will rise by up to 60%, adding a tax burden to the worries of homeowners.

In particular, with the possibility that many cases will occur where the property tax, including the comprehensive real estate holding tax (hereafter known as the comprehensive land tax) will triple from last year, it is anticipated that taxpayers will initiate collective objections.

According to the 2007 Bill on the Price of Apartment Houses published on the website of the Ministry of Construction and Transportation (MOCT) on March 14, the government has raised the declared value of homes for 2007 by a large degree, after allowing for the rise in housing prices last year. The MOCT explained that the standard for calculating declared value was set at 80% of the market price.

The Bill on the Price of Apartment Houses will be confirmed and publicly announced on April 30 after an appraisal by homeowners.

The degree of increase in the declared value was the highest in the “bubble” regions, including Gangnam-gu, Seoul, and the new cities in the capital region.

The declared value of a 35-pyeong apartment in 7 complexes along the new streets of Mok-dong, Yangcheon-gu, Seoul, was 920 million won, which is 53% higher than last year, and that of a 34 pyeong Eunma Apartment in Daechi-dong, Gangnam was around one billion won, which is 47% higher than last year.

In Ilsan New City, Goyang-si, Gyeonggi, a 31 pyeong Gangseondongsin apartment in Juyeop-dong rose from 184 million won to 296 million won, a rise of 60%.

The immovable asset industry estimates that the number of people who will be affected by the comprehensive land tax will rise steeply from 348,000 people last year to at least 500,000 people this year.

With the steep rise in declared value and the elevation of the application rate of imposing the comprehensive land tax (the standard price for imposing taxes) from 70% last year to 80% this year, it is anticipated that taxpayers will face heavier taxes, including the comprehensive land tax, which will be announced in December this year.

The declared value of a 34 pyeong Eunma Apartment rose by 47% from last year, but the property tax tripled from 2.16 million won last year to 6.48 million won this year.

Residents are raising objections.

The representative council of the residents in Bundang proposed to hold a general meeting on March 27 to raise an objection while simultaneously carrying out a campaign to abolish the “household-to-house” comprehensive land tax and to reduce the transfer tax.

Kim Tae-soo (52), the manager of this organization, asserted, “That the government should raise the declared value excessively while the actual price houses are traded at rose by about 10% from last year due to their oppressive policies implies that the government is taking vindictive measures.”

Also, an official of Gangnam-gu, Seoul said, “I expected the percentage of rise in declared value compared to last year would be about 5%, the initial average rate in Gangnam, but the newly announced percentage is as high as 30%. I’m worried that the residents of Gangnam will vent their objections.”

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