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| Seen above is Jugong Apartment complex 5 in Jamsil, Songpa-gu, Seoul, Monday. As the government announced the sharply increased officially assessed apartment prices for this year, owners in the expensive Gangnam area, including the Jugong Apartments, will face heavier property taxes. / Yonhap |
By Nam Hyun-woo
The officially assessed apartment prices in Seoul have risen more than 10 percent, or twice the national average, from a year earlier, according to government data, Monday. With the prices in Gangnam showing an especially sharp increase, concerns are deepening among apartment owners in the area because the official prices are the base for property and real estate taxes.
The Ministry of Land, Infrastructure and Transport announced this year's officially assessed apartment prices and said the prices of 12.89 million apartments across Korea rose an average 5.02 percent from the previous year.
Among them, the prices of apartments in Seoul rose 10.19 percent during the same period, which was the sharpest rise in 11 years.
The officially assessed prices are surveyed by the ministry and announced with the primary purpose of calculating taxes on homes, land and apartments. They are roughly 70 percent of the actual market price.
Of notice in this year's announcement are that the prices rose more sharply among expensive apartments, especially those in the so-called Gangnam area _ Gangnam-gu with an average rise of 13.73 percent, Seocho-gu with a rise of 12.79 percent and Songpa-gu with a rise of 16.14 percent.
The hike in the official prices will lead to heavier taxes. Currently, the government uses 80 percent of an apartment's officially assessed price to calculate property tax. Depending on the adjusted amount, the government places apartments in levying brackets which range from 0.1 to 0.4 percent tax rate.
Weighing even more on apartment owners in the Gangnam area is the real estate tax. The government imposes additional real estate taxes on owners of apartments with government-assessed prices surpassing 900 million won. The standard goes down to 600 million won when the owner has more than two homes.
When the government announced the prices rising, a number of apartments -- such as the Donghyun Apartments in Gangnam-gu or the Jamsil L's Apartments in Songpa-gu -- have been newly subjected to steeper real estate taxes, even if the owners don't own other homes.
According to the ministry, the number of apartments worth more than 900 million won stood at 140,000 this year, up 52 percent from 92,000 last year.
Based on such a levying system, some apartments in the Gangnam area showed a nearly 50 percent hike in their taxes.
The official price of a 76.5-square-meter home in Jugong Apartment complex 5 in Jamsil, Songpa-gu, rose to 1.15 billion won this year, up 25.2 percent from the previous year. And the combined taxes on these apartments will rise to 3.96 million won this year, up 46.67 percent from 2.7 million won the previous year, according to KB Kookmin Bank tax analyst Won Jong-hoon.
Casting more fear for Gangnam apartment owners is that the government is poised to apply tougher tax rules on real estate in part of its bid to stabilize the country's "overheated" housing market.
Rep. Park Joo-min of the main opposition Democratic Party of Korea has tabled a bill that would remove the 80 percent adjustment rule in calculating property tax, in a bid for taxes to reflect market prices more accurately. This will put the government-assessed real estate price directly in the levying brackets, raising the amount of property tax.
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