Expected 448 Million KRW, Up 2.8% from This Year
Nature Republic in Myeongdong, Seoul Ranks No.1 Nationwide for Land Prices
With a slight increase in the official public prices of standard houses and standard land next year, the burden of property tax is expected to rise slightly compared to this year. Among the standard houses, the most expensive one, the detached house owned by Shinsegae Chairwoman Lee Myung-hee in Hannam-dong, Yongsan-gu, Seoul, is estimated to see a property tax burden increase of 12.48 million KRW compared to this year.
The most expensive standard detached house in the country, owned by Lee Myung-hee, chairman of Shinsegae Group, located in Hannam-dong, Yongsan-gu, Seoul. Officially assessed land price: 14.3 billion KRW. Photo by Yonhap News
On the 21st, Asia Economy Newspaper conducted a simulation commissioned to Woo Byung-tak, Deputy Branch Manager of Shinhan Bank Apgujeong Corporate Finance Center. Assuming that Chairwoman Lee owns only this house located at Itaewon-ro 55ra-gil, Yongsan-gu, Seoul, the property tax is estimated to rise from 436.38 million KRW this year to 448.87 million KRW next year, an increase of about 12.48 million KRW (2.86%). Due to the rise in next year’s official public price of standard houses, the property tax that Chairwoman Lee must pay will also increase slightly. The scheduled official price of Chairwoman Lee’s house is 12.46255 billion KRW.
Seo Kyung-bae, Chairman of AmorePacific Group, who owns a house in the same neighborhood, paid 195.82 million KRW in property tax this year, but next year is expected to pay 203.75 million KRW, an increase of 7.93 million KRW. The owner family of Kyungwon Segi’s house in Itaewon-dong is expected to pay 199.48 million KRW in property tax next year, which is 6.06 million KRW more than this year. Park Chan-gu, Chairman of Kumho Petrochemical, who owns a house in Hannam-dong, is expected to receive a property tax bill increased by 3.18 million KRW next year. The property tax for detached houses ranked in the top 10 in official prices will increase by between 3 million KRW and up to 12 million KRW.
With the slight rise in next year’s official public prices of standard houses, property taxes on high-priced houses have all increased. The Ministry of Land, Infrastructure and Transport set the realization rate of next year’s official public prices for standard houses at 53.6%. The official public price of standard detached houses nationwide rose by an average of 0.57% next year. Among these, Seoul’s official public prices rose by 1.17%, with the increase rates in Gangnam-gu (1.87%) and Seocho-gu (1.53%), where many high-priced houses are concentrated, being even higher.
The official public price of Nature Republic in Myeong-dong, Seoul, ranked first nationwide in land price, rose by 0.75% next year, and the property tax burden is estimated to increase by 1.68 million KRW to 199 million KRW. The property tax for the Woori Bank site in Myeong-dong next year is expected to be 567.19 million KRW, an increase of 0.91% (5.12 million KRW) compared to this year. The property tax for the Chungmuro 2-ga collective building (former Uniqlo site) is expected to remain at about 379 million KRW next year, the same as the previous year. The property tax for the Tony Moly (71㎡) site in Chungmuro 2-ga, ranked fourth in land price, will rise by 1.24% (700,000 KRW) to 57.74 million KRW next year. Similarly, the property tax for the VT Cosmetic Myeong-dong branch site in Myeong-dong is expected to increase by 660,000 KRW (1.31%) to 51.22 million KRW compared to this year.
The increase rate of property tax on standard land next year is expected to be between 0% and 4%. Due to the contraction of the Myeong-dong commercial district caused by COVID-19, the official public prices fell for two consecutive years last year and this year, then turned to an upward trend after three years. According to the Ministry of Land, Infrastructure and Transport, the official public price of standard land will rise by 1.1% next year compared to this year. The increase rate is the lowest level in the past 10 years (relative to absolute price changes).
Deputy Branch Manager Woo Byung-tak explained, "The official public prices of standard houses and standard land are more influenced by land prices than apartments or other multi-family housing," adding, "The reason why the fluctuation in next year’s official public prices is not large is that land prices have not changed much or have only slightly increased."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
