[2023 National Audit] Aftermath of Moon Government's Real Estate Data Manipulation... "Nationwide Reconstruction Complexes Must Pay About 1 Trillion Won More in Charges"

24 Redevelopment Charge Imposition Complexes
Due to Statistical Manipulation, Each Household Must Pay an Average of 85 Million Won More
9 Complexes Had Zero Charges but Now Face Charges

Due to the Moon Jae-in administration's manipulation of real estate statistics, it has been identified that the additional 'reconstruction charges' that nationwide reconstruction complexes must pay amount to approximately 1 trillion won.

Jamsil Jugong Apartment Complex 5. Photo by Heo Younghan younghan@

On the 10th, Yook Kyung-joon, a member of the National Assembly from the People Power Party and part of the Land, Infrastructure and Transport Committee, analyzed the 'Reconstruction Charge Estimated Amount Verification Report' for 51 reconstruction complexes nationwide, submitted by the Korea Real Estate Board. The analysis revealed that due to the Moon Jae-in administration's manipulation of real estate statistics, members of 24 reconstruction complexes across the country have to pay about 1 trillion won more in reconstruction charges that they should not have had to pay.

The Korea Real Estate Board's housing price trend survey statistics are used not only to understand market trends but also to calculate reconstruction charges for reconstruction complexes and gift tax assessments, directly affecting citizens' property rights.

Reconstruction charges are calculated by subtracting the housing price at the start and development costs from the housing price at the end of reconstruction, then deducting the price increase portion calculated by applying the price increase rate from the Real Estate Board's statistics. The structure is such that the less the real estate price rises, the more reconstruction charges must be paid. As a result, if the Real Estate Board's statistics, manipulated by the Moon Jae-in administration to show a lower increase rate than private statistics, are applied, reconstruction charges increase.

In fact, an analysis of the charges for Reconstruction Complex A located in Yeongdeungpo, Seoul, showed that the estimated reconstruction charge per member was 26.2 million won based on the manipulated Korea Real Estate Board statistics, whereas according to private KB statistics, the reconstruction charge to be paid was only 500,000 won.

Conceptual diagram of reconstruction surcharge. (Source: Office of Yoo Kyung-jun, People Power Party)

The situation is even more severe for Reconstruction Complex B located in Gangnam-gu, Seoul. The reconstruction charge per member calculated using the Real Estate Board statistics reached 347 million won, but according to private KB statistics, there was no reconstruction charge to be paid. Due to the manipulation of statistics, members have to pay reconstruction charges of 350 million won that they should not have had to pay.

As in the cases mentioned earlier, the total amount of additional reconstruction charges that members of 24 reconstruction complexes nationwide have to pay due to manipulated statistics is estimated to be about 1 trillion won.

On average, these individuals could be charged an additional 85 million won per household, and among them, 9 complexes (38%) originally had zero reconstruction charges, but due to the manipulation of statistics, charges that should not have been imposed have arisen.

The problem is that the manipulated Korea Real Estate Board statistics are also used in calculating gift tax. Similar to reconstruction charges, gift tax is calculated by subtracting the acquisition cost and the value increase portion, which is calculated by applying the Real Estate Board's housing price statistics, from the current value of the gifted property. The lower the housing price increase, the more gift tax must be paid.

Over the past five years (2018?2022), it is estimated that about 573,000 cases of gift tax payments related to real estate (land + buildings) applied the Real Estate Board's statistics, with the total tax paid amounting to 106.0224 trillion won.

Assemblyman Yook Kyung-joon stated, "Since the manipulated statistics are expected to cause enormous property damage to innocent citizens, the Ministry of Land, Infrastructure and Transport must urgently correct the manipulated statistical figures," adding, "Given that the situation is even more serious for gift tax, the Ministry of Land, Infrastructure and Transport should promptly work closely with the Ministry of Economy and Finance and the National Tax Service to prepare measures for citizens who paid more gift tax due to the manipulated statistics."