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▲ The government decided to raise the real estate public price realization rate to 90%, which is the basis for taxes such as property tax and tax. The photo shows an apartment in central Seoul. Yunhap news |
On the 3rd, the Ministry of Land, Infrastructure and Transport and the Ministry of Public Administrations and Security announced a plan to specify the official price with the main idea.
As of this year, the official price realization rate is 65.5% for land (standard land), 53.6% for single-family homes (standard home) and 69.0% for apartment houses. The government’s plan is to raise it to 90%.
According to the realization plan, the realization rate increase rate is different for houses based on the market price of 900 million won. For houses with less than 900 million won, the official price rises smoothly to reach a certain intermediate target (completion rate) for the first three years and then rises to the target value. In the first three years, the increase in the completion rate will be reduced to 1 percentage point, reducing the initial shock and then increasing it by 3 percentage points.
Currently, the realization rate for homes below 900 million won is 68.1% for apartments and 52.4% for single-family homes, three years later, in 2023, 70% for apartments and 55% for single-family homes. After that, increase the update rate equally by 3 percentage points each year to reach 90%.
Homes with more than 900 million won rise evenly toward the target completion rate. For apartment houses over 900 million won, they all increase by 3 percentage points per year, but for single-family homes, from 900 million won to 1.5 billion won they increase by 3.6 percentage points per year, and those over 1.5 billion won are increasing by 4.5 percentage points per year.
If the public price rises to this rate, the realization rate of apartment houses of less than 900 million won will reach 90% in 2030. The upgrade rate from 900 million to 1.5 billion won will reach 90 % in 2027 and apartment buildings with 1.5 billion won or more in 2025. For single-family homes, the completion rate will be 90% in 2035 for homes with less than 900 million won, the rate of realization for homes over 900 million to 1.5 billion won by 2030 and over 1.5 billion won by 2027.
In the case of land, the completion rate will increase by 3 percentage points per year to reach 90% in 2028.
The government decided to reduce the property tax rate on homes with a listed price of 600 million won or less held by a first-generation homeowner by 0.05 percentage points over the next three years, in order to reduce the tax burden on the low-income class due to the increase in public price. In this case, up to 30,000 won for the public price of 100 million won or less, 30,000 to 75,000 won for 100 million to 250 million won, 75,000 to 150,000 won for 250 million to 500 million won, and 500 to 600 million won. 150,000 ~ 180,000 won will be reduced.
The reduction rate is 22.2 ~ 50%. Homes with an official price of 100 million won or less will receive a 50% reduction in the amount of money. Due to the nature of progressive tax excess, the higher the home price, the lower the reduction rate.
The Ministry of Public Administration and Security predicted that most of the first owners could benefit from this tax cut. According to the property tax imposed this year, 94.8% (10,300,000 households) of a house per person with an official price of 600 million won or less than 10.86 million households per person per person.
The tax rate cut will apply for three years from next year to 2023, and will be revised for extension after taking into account changes in the housing market and the effect of making the published price. The reduced tax rate will be applied from the property tax imposed next year. The tax base date is June 1.
