National Official Land Prices Fall 18.61%... Reduced Property Tax Burden
Concerns Over Welfare Tax Revenue Shortfall Deemed "Manageable"
Regarding the 18.61% drop in the nationwide official price of apartment complexes compared to last year, the Presidential Office on the 22nd evaluated it as "a result of the government's policy efforts combined with the overall downward stabilization trend in the real estate market." The government anticipates the possibility of cases where property taxes are imposed even lower than the 2020 level, surpassing President Yoon Seok-yeol's pledge to reduce property taxes to the 2020 level.
Choi Sang-mok, Chief Secretary for Economic Affairs at the Presidential Office, held a briefing at the Yongsan Presidential Office in the afternoon and stated, "President Yoon Seok-yeol promised the public during the presidential election campaign to lower the national property tax burden to the 2020 level."
Earlier, the Ministry of Land, Infrastructure and Transport disclosed the '2023 official price plan for apartment complexes nationwide (as of January 1)' covering 14.86 million households of apartment complexes (apartments, multi-family houses, and row houses). The ministry explained that this year's official price plan for apartment complexes fell by 18.61% compared to last year, noting, "Considering that the official price of apartment complexes rose by 17.20% last year, this year's official price has effectively returned to the 2021 level."
The Presidential Office added, "Going forward, the government will do its best to ease the public burden through real estate stabilization and tax normalization." Chief Secretary Choi elaborated, "The official price announced today for 2023 is about 13% higher than in 2020," adding, "Due to the reduction in the official price realization rate and real estate tax cuts pursued since the launch of the Yoon Seok-yeol administration, the property tax burden will be more than 20% lower than in 2020, so it can be said that President Yoon has firmly fulfilled the promise made to the public."
He also mentioned that the drop in official prices will increase benefits for the public. Chief Secretary Choi explained, "The official price is used as a standard not only for property taxes but also in over 60 types of administrative areas," adding, "With this decline, the public burden will decrease and welfare benefits will increase." In fact, it was analyzed that due to this drop in official prices, the health insurance premiums for regional subscribers will decrease by an average of 3.9% per month. Moreover, citizens who lost eligibility for basic living security, national scholarships, and work scholarships due to the rapid rise in official prices over the past two years will be able to regain these benefits.
However, it seems unavoidable that there will be a shortfall in tax revenue due to the decline in official prices. Chief Secretary Choi emphasized, "Although the comprehensive real estate tax revenue last year was about 4 trillion won, and there will be a decrease in tax revenue, it is difficult to see it as a large portion of the overall fiscal scale," adding, "At present, it is a manageable level."
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