Ministry of Land, Infrastructure and Transport Announces 2024 Officially Published Prices
Applying the 2020 Realization Rate Same as This Year
The official prices for standard land and standard detached houses, which serve as the basis for land and detached house ownership taxes, will rise slightly next year compared to this year. Standard land prices will increase by 1.1%, and standard house prices by 0.57%. This is the result of applying the government's 2020-level price realization rates for next year's official prices (65.5% for standard land, 53.6% for standard houses), the same as this year.
Accordingly, the burden of various taxes, including ownership tax, to be paid next year is expected to increase slightly or remain similar to this year. In fact, the ownership tax burden for the detached house ranked first in official price next year, owned by Lee Myung-hee, Chairwoman of Shinsegae, located in Hannam-dong, Yongsan-gu, Seoul, is estimated to increase by 12.48 million KRW compared to this year, and the Nature Republic site in Myeong-dong, Seoul, ranked first nationwide in land price, will see an increase of 1.68 million KRW in ownership tax burden.
Standard Detached House Official Price Up 0.57%, Standard Land Official Price Up 1.1%
On the 20th, the Ministry of Land, Infrastructure and Transport announced the '2024 Standard Land and Standard Detached House Official Price (Draft)' for 580,000 standard land parcels and 250,000 standard houses, which the government deemed representative among the 35.35 million land parcels nationwide subject to official pricing.
First, next year's official price for standard detached houses showed the lowest rate of change since the introduction of housing official pricing in 2005, rising by 0.57% compared to this year.
As a result, the detached house in Hannam-dong owned by Chairwoman Lee Myung-hee, which has maintained the top spot in official price since being classified as a standard detached house in 2016, will have an official price of 28.57 billion KRW next year, up 1.9% from 28.03 billion KRW this year.
The second highest official price for a standard detached house is the residence of Lee Hae-wook, Chair of DL Group, located in Samseong-dong, Gangnam-gu (total floor area 2,617.4㎡), with an official price of 18.65 billion KRW next year, a 2.5% increase from this year.
The Seungjiwon, the Samsung Group's guesthouse owned by the Hoam Foundation of Samsung Group in Itaewon-dong, Yongsan-gu (total floor area 609.6㎡), will have an official price of 17.17 billion KRW next year, up 2.2% from this year. The official price of the house in Itaewon-dong, Yongsan-gu, owned by Seo Kyung-bae, Chair of Amorepacific, will rise 3.0% to 16.75 billion KRW next year.
The official land price for standard land will increase by 1.1% next year compared to this year. This increase rate is the lowest in the past 10 years (rate of change relative to absolute price). Among standard lands, the Nature Republic site (169.3㎡) in Chungmuro 1-ga, Jung-gu, Seoul, has the highest official land price next year at 175.4 million KRW per square meter, up 0.7% from this year. The Woori Bank site (392.4㎡) in Myeong-dong, ranked second nationwide in land price, will have an official land price of 174 million KRW per square meter next year, 0.8% higher than this year.
Nationwide No.1 12.4 Billion KRW House Ownership Tax Up 12 Million KRW Next Year
With the slight increase in next year's standard land and standard detached house official prices (draft), the ownership tax burden next year is expected to be similar to or slightly higher than this year.
According to a simulation requested by Asia Economy Newspaper from Woo Byung-tak, Deputy Branch Manager of Shinhan Bank Apgujeong Corporate Finance Center, assuming Chairwoman Lee owns only this house located in Itaewon-dong, Yongsan-gu, Seoul, the ownership 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%).
Seo Kyung-bae, Chair of Amorepacific Group, who owns a house in the same neighborhood, paid 195.82 million KRW in ownership tax this year, but is expected to pay 203.75 million KRW next year, an increase of 7.93 million KRW.
The ownership tax on the house in Itaewon-dong owned by the Kyungwon Segi family is expected to increase by 6.06 million KRW to 199.48 million KRW compared to this year. Park Chan-gu, Chair of Kumho Petrochemical, who owns a house in Hannam-dong, is expected to receive an ownership tax bill that is 3.18 million KRW higher next year. Ownership taxes for detached houses ranked in the top 10 in official price will increase by between 3 million KRW and up to 12 million KRW.
The exterior of Nature Republic in Myeongdong, Seoul, ranked number one in land prices nationwide. [Image source=Yonhap News]
The official land price of Nature Republic in Myeong-dong, Seoul, ranked first nationwide in land price, is expected to rise 0.75% next year, with the ownership tax burden estimated to increase by 1.68 million KRW to 199 million KRW. The ownership tax for the Woori Bank site in Myeong-dong is expected to increase by 5.12 million KRW (0.91%) to 567.19 million KRW next year. The ownership tax for the Chungmuro 2-ga collective building (former Uniqlo site) is expected to remain at about 379 million KRW, the same as last year.
The ownership tax for the Tony Moly site (71㎡) in Chungmuro 2-ga, ranked fourth in land price, will increase by 700,000 KRW (1.24%) to 57.74 million KRW next year. Similarly, the ownership tax for the VT Cosmetic Myeong-dong branch site in Myeong-dong is expected to rise by 660,000 KRW (1.31%) to 51.22 million KRW compared to this year.
Deputy Branch Manager Woo Byung-tak explained, "Official prices for standard houses and standard land are more influenced by land prices than apartment or other multi-family housing prices," adding, "The reason why the official price changes next year are not large is that land prices have not changed much or have only slightly increased."
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