By Lee Hyo-sik
Staff Reporter
An increasing number of homeowners subject to comprehensive real estate taxes are moving to boycott paying the high property taxes.
This year's sluggish housing market has further prompted property holders to lodge complaints against the rising government-assessed standard prices, which are used for calculating a range of property-related taxes, including the comprehensive real estate tax, analysts said.
According to the Ministry of Construction and Transportation, the government-assessed standard price for apartments this year rose 22.8 percent across the country from a year ago, reflecting the price hike last year. Land prices rose 12.4 percent on average.
In 2006, the average apartment price nationwide jumped by 11.6 percent last year, while apartment prices rose 18.4 percent in Seoul. Gyeonggi Province alone posted a 24.8 percent gain, according to Kookmin Bank.
The government expects to collect revenue of about 3.15 trillion won in overall real estate-holding taxes this year, up 18 percent from 2006.
The revenue of the comprehensive real estate tax alone, which is levied on homes worth more than 600 million won ($635,000) and land valued at over 300 million won, will increase 68 percent to 2.9 trillion won in 2007 from 1.7 trillion won a year ago.
The ministry said the number of real-estate rich households reached 381,000, up 149,000 from a year ago and each will be paying around 3.2 million won as comprehensive real estate tax on average.
A group of residents in high-priced apartment complexes in Seoul and elsewhere are poised to file formal objections to the government, seeking to lower the standard prices and thus property taxes.
In Gwacheon where standard apartment prices shot up nearly 50 percent on average from a year earlier, many residents said that they will protest against the government-assessed prices and file a complaint with the Constitutional Court, if necessary.
``I have only one house valued over 600 million won, up nearly 60 percent from a year earlier. I have been living in the same apartment for the past 10 years and I do not understand why the government is indiscriminately punishing homeowners by imposing heavy taxes,'' said a resident in one of the public apartment complexes in Gwacheon.
She said she and other residents in the complex are planning to file a collective protest against the government over the standard prices.
Also, the recently sluggish housing market is further driving owners of high-priced homes to resist the heavy property tax burden as home prices have fallen in the absence of buying interest since the beginning of the year.
From early January after the government unveiled a range of anti-speculation measures, including a ceiling on prices of new apartments and the disclosure of private builders' construction costs, designed to curb rises in home prices, the housing market has shown signs of weakness.
``Some apartment prices have fallen by up to 300 million won over the past four months in the area because of government measures designed to rein in rises in home prices. Also, the heavy tax burden on property holders has hit the housing market hard,'' said a realtor in Kwachon.
He said homeowners have been putting their homes up for sale to avoid the extensive property tax, but there are few transactions as prospective buyers are taking a wait-and-see attitude for a further drop in prices.