Seoul Housing Gifted Share Hits Record High at 12.5%

Analysis of Housing Transaction Causes by Korea Real Estate Board from January to September This Year

[Asia Economy Reporter Hwang Seoyul] The proportion of gifted housing transactions in Seoul from January to September this year reached an all-time high. This trend is attributed to the decline in real estate prices and the upcoming change in the acquisition tax calculation criteria starting next year, prompting people to expedite gifting.

On the 9th, Economic Man Lab, a real estate information provider, analyzed the causes of housing transactions from the Korea Real Estate Board. Among the total 79,486 housing transactions in Seoul from January to September this year, 9,901 were gift transactions, accounting for 12.5% of the total. The proportion of gifted housing transactions hit a record high.

Among Seoul's 25 autonomous districts, Nowon-gu had the highest proportion of gifted housing transactions. During the same period, out of 1,999 housing transactions in Nowon-gu, 556 were gifts, making up 27.8% of the total. This means that one out of every four housing transactions was a gift.

Following that, the proportion of gifted housing transactions was 21.1% in Jongno-gu, 19.5% in Yongsan-gu, 18.4% in Seodaemun-gu, 16.1% in Jung-gu, 15.8% in Songpa-gu, and 14.9% in Seocho-gu. The district with the lowest proportion of gifted housing transactions was Geumcheon-gu at 6.4%.

Nationally, the proportion of gifted housing transactions also reached a record high. Among the total 748,625 housing transactions nationwide from January to September this year, 65,793 were gifts, accounting for 8.8% of the total. This is the highest figure since the Korea Real Estate Board began compiling related statistics in 2006 (based on January to September data).

The increase in the proportion of gifted housing transactions this year is analyzed to be due to the change in acquisition tax criteria for gifts starting next year, shifting from the standard market price to the recognized market price. The standard market price is the publicly announced price (officially assessed price) used by the government to collect real estate-related taxes, typically about 60-70% of the market price. In contrast, the recognized market price is determined based on recent transaction prices near the acquisition date and is usually higher than the official assessed price. Calculating gift acquisition tax based on the recognized market price inevitably increases the tax amount.

Moreover, as real estate prices enter a downward phase, psychological factors seem to encourage choosing gifting over quick sales.

Hwang Hansol, a research fellow at Economic Man Lab, stated, "Although the absolute volume of gifted transactions has decreased, the decline in housing prices has lowered the standard price for gift tax calculation, and combined with the change in acquisition tax criteria for gifts, the proportion of gifted transactions appears to have increased."

Meanwhile, from January to September this year, Daegu recorded the second-highest proportion of gifted housing transactions nationwide at 11.9%, following Seoul. This was followed by Jeonnam at 11.6%, Jeju at 11.4%, Daejeon at 9.4%, Busan at 9.0%, and Jeonbuk at 8.7%. Nationwide, the volume of gifted housing transactions decreased by 39.0% compared to the previous year, from 107,775 cases in January to September last year to 65,793 cases in the same period this year.