First reduction of 5.95% in 14 years
A reduction of up to 30% in the property tax burden
The published price of standard houses in Seoul, 8.55% lower than last year
Apartment prices will be published in March this year, and a double-digit drop is expected
The official price of standard land and standard housing, which is the benchmark for separate land and housing prices across the country, fell for the first time in 14 years. In the case of Seoul’s standard house price, it is expected to decrease by 8.55% compared to last year, reducing the ownership tax burden by up to 30%.
The Ministry of Land, Infrastructure and Transport decided and published the 25th official price of standard land and standard houses in 2023 with these contents. Based on this, local governments set the official price of individual land and houses separately.
The official price of 250,000 standard housing units fell by an average of 5.95% nationwide compared to last year. Although the official standard housing price has fallen in all regions, Seoul had the biggest drop (-8.55%). It was followed by Gyeonggi (-5.41%), Jeju (-5.13%), and Ulsan (-4.98%). The official price of 560,000 sheets of standard paper fell by 5.92% on average across the country. The biggest declines were seen by Gyeongnam (-7.12%), Jeju (-7.08%), Gyeongbuk (-6.85%), Chungnam (-6.73%), and Ulsan (-6.63%).
The standard house price realization rate was 53.5%, down 4.4 percentage points from last year (57.9%). The rate of realization of standard paper prices was 65.4%, down 6 percentage points from last year (71.4%). This is because the government has lowered the official price realization rate this year to the 2020 level as the official price reversed higher than the actual transaction amid the slowdown in the real estate economy.
As the official price of standard land and standard housing falls, the burden on the public, such as property tax and comprehensive real estate tax, and health insurance premiums, is expected to ease. According to Woo Byung-tak, the head of the real estate investment advisory center at Shinhan Bank, in the case of a detached house with a market price of about 1.7 billion won (based on one house owner), the reduction in the official price will decrease the withholding tax gained 26.8% from 4.42 million last year to 3.23 million earned this year.
Due to a downward adjustment of the published price realization rate, the number of objections this year has fallen sharply. A total of 5431 objections to the published price were calculated. Compared to last year, it fell by 53.4%. A total of 391 views were actually reflected. In the case of standard land, up views (253 cases) were 3.7 times more than negative views, and for standard houses, down views (28 cases) accounted for 51.8% of the total views reflected (54 cases).
Meanwhile, the official price of the flats published in March is predicted to record a further double-digit reduction compared to standard land or standard houses. This is due to the fact that the official price realization rate has been lowered to the 2020 level, and the actual transaction price has plunged last year. In particular, it is analyzed that the tax burden will be reduced to the level before 2020 adding the effect of the comprehensive real estate tax review that was revised at the end of last year.
Reporter Kim Eun-jeong [email protected]