With the 7.10 real estate measures raising acquisition tax burdens for multi-homeowners up to 12%, niche products exempt from acquisition tax regulations are gaining popularity among investors.
According to the Ministry of the Interior and Safety's amendment to the Local Tax Act Enforcement Decree, in regulated areas, two-homeowners are subject to an 8% acquisition tax rate, and three-homeowners to 12%. Even in non-regulated areas, three-homeowners face an 8% rate, while corporations or owners of four or more homes are subject to a 12% rate.
The amendment also includes officetels, pre-sale rights, and move-in rights in the count of homes when determining whether a multi-homeowner is subject to acquisition tax surcharges. Thus, officetels and pre-sale or move-in rights acquired after the amendment's enforcement are also counted as homes.
Meanwhile, there is an exception in the Local Tax Act Enforcement Decree that is expected to bring indirect benefits. Article 28 of the decree states that officetels with a standard market price of 100 million KRW or less are not included in the home count.
Officetels priced at 100 million KRW or less are excluded from the home count even if used for residential purposes, and are exempt from acquisition tax surcharges. Especially for those without any homes yet, they can maintain their status as non-homeowners when applying for apartment subscriptions, attracting attention from investors and actual buyers.
A real estate expert said, “Although the Local Tax Act amendment has made the officetel market more challenging, officetels priced at 100 million KRW or less are excluded from the home count, increasing their investment value,” adding, “To achieve tax savings while expecting stable rental income, it is important to carefully consider location conditions and future value.”
‘Songpa Wirye New Town Sua-ju,’ located at Parking Lot 4BL in Geoyeo-dong, Songpa-gu, Seoul, is a single building with 6 basement floors and 15 above-ground floors, totaling 279 units, and its standard market price does not exceed 100 million KRW. Therefore, even if purchased by multi-homeowners, it is free from acquisition tax surcharges.
The location conditions, which are key to officetel investment, are also excellent.
First, it is situated in a prime location close to various infrastructures of Wirye New Town, recognized as a completed residential district. Right in front of the complex are office and commercial facility sites, providing easy access to various amenities, and nearby is Jangjicheon Waterfront Park, a 75,000㎡ area with sports and rest facilities, offering a pleasant residential environment.
The demand base is solid. Seven office sites near the complex will host various facilities such as public offices, police stations, fire stations, and military-related facilities. Once these office facilities are completed, ‘Songpa Wirye New Town Sua-ju’ is expected to become a residential complex supporting the office area. Additionally, it can secure demand from single-person households commuting to Jamsil and Gangnam areas.
Geoyeo Station on Seoul Subway Line 5 is within walking distance, allowing quick access to major business districts such as Jamsil and Gangnam. Notably, the Wirye Line (tram), whose project has recently been accelerated, is scheduled for completion in 2024, and through the adjacent tram station, easy transfers to Lines 5 and 8, Bundang Line, and the planned Wirye-Sinsa Line are possible.
‘Songpa Wirye New Town Sua-ju’ applies a highly preferred specialized design, which is expected to facilitate tenant recruitment in the future. Despite its small size, all units are designed as duplexes. The duplex structure separates bedrooms and living spaces, and the 4.1m high ceiling is utilized to create well-organized storage spaces.
A full-furnished system is also applied. Built-in designs include shoe cabinets, storage cabinets, wardrobes, refrigerators/freezers, washing machines, microwaves, and two-burner electric cooktops, reducing the cost burden on tenants and maximizing space utilization.
Officetels are located from the 7th floor upwards, resolving security and privacy issues common in low-floor officetels. Especially, with neighborhood parks and office districts (including a planned fire station) surrounding the site, residents can expect unobstructed open views and good sightlines.
‘Songpa Wirye New Town Sua-ju,’ spotlighted as a niche investment destination for smart investors, is currently offering remaining units on a first-come, first-served basis. The sales promotion center is located on the 2nd floor of Samyoung Building, 654 Olympic-ro, Gangdong-gu, Seoul.
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