[Asia Economy (Suwon) = Reporter Lee Young-gyu] Gyeonggi Province will begin maintenance work this month on 194,867 households in the province to resolve the 'price inversion phenomenon,' where the individually announced land price is higher than the individual housing price, which combines land and housing values.
On the 14th, Gyeonggi Province announced that it will carry out the "2022 Comprehensive Maintenance of Characteristic Discrepancies and Price Inversion Phenomena between Housing and Land."
The price inversion phenomenon occurs when the departments responsible for the individually announced land price (land department) and the individual housing price (tax department) investigate land characteristics differently, such as the relationship with roads, land elevation, and shape.
For example, as of January 1 last year, the individual housing price (land + house) of House B in City A was announced as 31.2 million KRW, while the individually announced land price (land) was 138.99 million KRW (7.02 million KRW per 1㎡). This means the land price alone was more than four times higher than the combined land and building value.
As of July, there are a total of 194,867 households in the province, including 46,798 cases of characteristic discrepancies and 148,069 cases of price inversion phenomena.
Accordingly, the province will verify the appropriateness of standard housing selection and check for errors in housing characteristic investigations for 194,867 households within the year. After notifying the relevant city or county of the results, the city or county will review the cases through the Real Estate Price Disclosure Committee and carry out maintenance on characteristic discrepancies and price inversion phenomena.
A provincial official stated, "Individual housing prices and individually announced land prices are standard prices used for levying local taxes such as property tax and acquisition tax, as well as national taxes like comprehensive real estate tax," adding, "We expect that this maintenance will realize fair tax justice."
Meanwhile, last year, the province was the first local government nationwide to establish a maintenance plan for characteristic discrepancies and maintained 304 cases of characteristic discrepancies and 1,488 cases of price inversion phenomena.
Additionally, the province has been continuously recommending to the central government improvements to the real estate price disclosure system, such as delegating authority for standard real estate investigation and evaluation and individual real estate guidance and supervision to provincial governors, and granting access rights to accessory land during individual housing price investigations, to resolve institutional issues in real estate price disclosure.
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