Fluctuating with Each Administration... Real Estate Official Price Assessment System to Be Revised Again [Why&Next]

Ministry of Land Prepares to Commission Study
Moon Administration's Realization Plan to Be Revised and Supplemented
Yoon Administration's "Rationalization Plan" to Be Set Aside...
"New Administration Policy Direction"

The government has decided to once again revise the system for determining officially announced real estate prices. Previously, under the Moon Jae-in administration, a “realization plan” was established to gradually increase these prices each year. However, the subsequent Yoon Suk-yeol administration reversed this policy, restoring prices to previous lower levels under the name of a “rationalization plan.” Over the past five years, the calculation method has swung in completely opposite directions, and now another revision is underway. As the system for determining officially announced prices continues to fluctuate depending on the administration’s policy direction, it is expected that criticism over growing confusion will be unavoidable.

In June last year, officials from the Citizens' Coalition for Economic Justice in Jongno-gu, Seoul, held a press conference to announce the analysis results of Seoul apartment market prices, publicly announced prices, and property tax. Photo by Kang Jinhyung aymsdream@

Revision Direction for Realization Plan to Be Commissioned Soon

According to explanations from relevant ministries on the 17th, the Ministry of Land, Infrastructure and Transport will commission a research project titled “Review of the Revision Direction for the Real Estate Officially Announced Price Realization Plan.” In the request for proposals for this research, the ministry assessed that there is a lack of public consensus for either re-implementing the existing “realization plan” or pursuing the “rationalization plan” through amendments to the Officially Announced Price Act. The ministry also stated, “It is necessary to establish a direction for the official price policy that takes into account the new administration’s policy stance.”

The request for proposals does not specify how the research report on the revision direction of the realization plan will be used. However, the act of commissioning an external research project itself can be seen as a preliminary step taken before changing the direction of existing policies.

This research will analyze the outcomes of the realization plan introduced in 2020 during the Moon Jae-in administration, as well as assess the limitations observed during the two years it was applied after its introduction.

A view of apartment complexes in downtown Seoul as seen from Namsan, Seoul. 2025.06.27 Photo by Dongju Yoon

The officially announced real estate price system was introduced in 1989 to institutionally support the concept of public land ownership. It is a system that annually determines and announces the appropriate prices for land or housing (both detached and multi-unit), and is used in 67 different administrative areas including taxation and welfare. The officially announced price differs from the market price, which reflects the actual market value. The goal of the realization plan was to address this discrepancy. According to the government’s assessment in 2019, the officially announced price reflected only 65% of the market price for standard land, 53% for detached houses, and 68% for multi-unit housing. The plan aimed to gradually raise these rates each year to reach about 90% by 2035. In 2020, the Real Estate Officially Announced Price Act was amended to make it mandatory to set targets for market price reflection rates and establish a plan accordingly.

It was the Yoon Suk-yeol administration that scrapped this plan, reverting the market price reflection rates to pre-2020 levels. Former President Yoon had openly pledged to abolish the realization plan during his presidential campaign. However, due to a continued opposition-majority National Assembly during his term, he was unable to change the law. The Ministry of Land, Infrastructure and Transport introduced a new “rationalization plan” last year, citing the need to “enhance balance rather than artificially increase officially announced prices.”

In preparing for this research project, the ministry also recognized problems with the rationalization plan. The ministry stated that one of the main tasks of the research is to “analyze the issues that have been raised with the rationalization plan, such as tax cuts for the wealthy and speculation inducement, and present measures to address them.”

Housing rights network and related housing civic groups held a press conference presenting proposals on housing and real estate policies in front of the National Policy Planning Committee in Jongno-gu, Seoul on June 17, 2025. Photo by Cho Yongjun

Comprehensive Real Estate Tax to Rise with New Official Price Calculation... “Reliability Must Be Enhanced”

Although both the “realization plan” and the “rationalization plan” are being reconsidered, it is highly likely that the revision direction will be based on the realization plan. In particular, the name of the research project itself is “Proposal for the Revision Direction of the Officially Announced Price Realization Plan,” suggesting that the realization plan is likely to carry more weight.

In this context, President Lee Jaemyung has repeatedly stated before and after the presidential election that he would not try to control housing prices through taxation. However, if the realization plan is revised, it is expected that the burden of holding taxes could increase even without changing the tax system itself. If the increase in officially announced prices is greater than in previous years as a result of revising the realization plan, the burden of holding taxes will likely rise accordingly. The comprehensive real estate tax is calculated by multiplying the officially announced price, which is lower than the market price, by a fair market value ratio set arbitrarily by the government.

The Ministry of Land, Infrastructure and Transport did not specify when the results of this research will be applied. However, considering that the research project is expected to take about one year, it is anticipated that the system could be changed as early as next year, with the new framework implemented the following year.

Experts point out that, given the persistent issues with the accuracy and reliability of Korea’s officially announced price system, it is necessary to support long-term measures to enhance these aspects. In a report published last April, Jang Kyungseok, a legislative researcher at the National Assembly Research Service, stated, “It is necessary to avoid artificially adjusting the market price reflection rate and to establish a system that reflects objective market value.” He also emphasized, “In the short term, the criteria for calculation within the current legal framework should be clarified. In addition, a step-by-step improvement should be pursued, including the introduction of specialized evaluation methods by property type, the separation of price and taxation policies, and the use of advanced technologies for system enhancement.”