After the government announced a plan to ease the comprehensive real estate tax (special property tax), the market for sale has been declining. There is also growing concern among frontline real estate brokers that the trading cliff will further deepen for the time being.
According to real estate big data company Asil on the 26th, apartment sales in Seoul fell by 2.13% from 64,046 on the 21st when the government announced the tax reform plan to 62,709 on the 25th. As the number of listings increased so far, the number increased to 65,988 at the beginning of this month, but it turned to a decreasing trend in the expectation that a tax reform plan would come out, and it decreased sharply after the announcement.
From the 21st to the 25th, the decrease in sales by autonomous district showed a decrease of 3.5% from 797 to 770 in Jung-gu and 3.44% in Seocho-gu, from 4239 to 4098. Guro-gu decreased by 3.42% from 3048 to 2947, Yeongdeungpo-gu decreased by 3.22% from 3008 to 2914, and Songpa-gu decreased by 2.90% from 4219 to 4100.
Front-line brokerage offices complain that sellers are disappearing after buyers. A brokerage office in Sinsu-dong, Mapo-gu, said, “No one wanted to buy a house this year, but now the landlords are asking for the sale to go down.” I want to,” he said. Then he said, “I’m going to go on a long summer vacation or something.”
“Please drop the property” in the tax reform Seoul sales decreased by 2.13%
The reason for the decrease in sales in the market can be found in the tax reform plan. The government’s reform plan included the abolition of the heavy tax system for multi-family dwellers and a reduction in the tax rate. In the past, a heavy tax rate of 1.2 to 6.0 percent was applied to multi-housing households, but according to the reform plan, the same tax rate is applied regardless of the number of houses. The basic tax rate will also be lowered from the current 0.6-3.0% to 0.5-2.7%. The upper limit of the tax burden for multi-family households, which was 300%, will also be adjusted to 150%.
According to the simulation, Woo Byung-tak, head of the real estate team at Shinhan Bank’s WM Consulting Center, the ownership tax (asset tax + property tax) to be paid in 2023 will be increased from 126.32 million won to the existing 126.32 million won by a multi-residential owner who owns one 84 m² of ‘Maporaemia Prugio’ and ‘Eunma Apartment’. It is reduced by 95.83 million won to 30.49 million won. In the past, there were many multi-homeowners who had to clean up the rest of the houses, leaving only one bright house due to the heavy-duty system.
An official from Brokerage Office B in Jongam-dong, Seongbuk-gu, said, “Most of the multi-households who are about to put up for sale are already on sale.” said He also said, “I haven’t been able to get a single transaction this month,” he said.
A significant reduction in property taxes… “There’s no reason to rush it.”
According to the Seoul Real Estate Information Plaza, the number of apartment sales in Seoul last month was only 1,060. It is less than a third of the 3942 cases in June last year, and a 93.3% drop from 15,623 cases in June 2020, two years ago. At the same time, the on-site evaluation is that about half of the direct transactions of donors that do not go through a brokerage office are expected.
As the transaction cliff deepens, the number of brokerage offices that go out of business is increasing. According to the Korea Real Estate Brokers Association, 314 offices closed in Seoul last month, a 67% increase from 188 the previous month, the highest number this year.
Experts predicted that the trade cliff will further deepen as the amount of quick sale by multi-housing houses decreases. Ham Young-jin, head of Big Data Lab in Jikbang, said, “Multi-homeowners have been given time to not have to make a gift or sale in a hurry due to the burden of the property tax burden. There is a high probability that they will return to holding.”
However, it is unclear whether the government’s tax reform plan will pass the threshold of the National Assembly. The majority party, the Democratic Party of Korea, strongly opposes the tax cut for the rich, so there are many observations that it will not be easy to pass the original bill. Shortly after the government announced the tax reform plan, Kim Seong-hwan, chairman of the Democratic Party’s policy committee, said, “It is difficult to agree with the idea of trying to earn excessive real estate income through consumption of more than three houses or unnecessary housing, while saying, “It is a position that we should provide as much protection as possible for single-homeowners or unavoidable second-homeowners.” “he emphasized.
Oh Se-seong, reporter at Hankyung.com sesung@hankyung.com
