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Starting with Seoul, the jeonse crisis is spreading across the country. The phenomenon of skyrocketing rental prices and no sale has been going on for several months. Since the supply of new apartments is also stagnating, each presale market is swarming with subscribers. 570,000 people flocked to the three complexes sold in Gwacheon, and tens of thousands of people flocked to Hanam and Sejong. Due to rising house prices, it became a “lottery subscription”, and large numbers of homeless people trying to escape the jeonse were crowded.
In the midst of this, the government goes on to explain that the cause of the jeonse crisis is the ‘imbalance of supply and demand’ and ‘low interest rate’. It also adheres to the policy of reducing loans and increasing tenure taxes. Today we will deliver news related to the real estate sector.
◆ Sae-gyun Jeong “I need to increase withholding tax” … Kim Hyun-mi “Loan to move to a better place”
This is the first news. Prime Minister Jeong Sye-gyun reaffirmed the government’s policy of increasing the property tax on real estate in the Comprehensive Policy Inquiry of the Special Committee on Liquidation and Budget of the National Assembly. Also, Prime Minister Chung said about the cause of the older generation, “(basically) it is caused by an imbalance in supply and demand, and there are aspects like liquidity in the market and interest rates.” He explained: “Because there are so many generational and high-end divisions, we cannot keep up with the increase in demand even if we work hard to supply it.”
Land, Infrastructure and Transportation Minister Kim Hyun-mi said: “The number of people who live by extending the contract while exercising the right to apply for contract renewal has increased and the supply has naturally decreased.” Regarding the rise in the price of jeonse, he said: “In the middle of the crown, the burden on loans has been reduced as the standard interest rate has fallen.”
◆ “One billion cheaper than market price” … 570,000 people flock to the subscription of 3 complexes in Gwacheon
Since it is up to 1 billion won cheaper than the surrounding market price, 570,000 people gathered in subscription to the three knowledge and information city complexes in Gwacheon-si, Gyeonggi-do, which were called “lottery sales “. Since it is a public residential site, the sale price itself has been set at an affordable price and the price margin has increased as prices for nearby apartments have risen in recent years.
According to the underwriting house of the Korea Appraisal Agency, ‘Gwacheon Prugio Oullim Labieno (458 households)’, ‘Gwacheon Recento Desian (394 households)’ and ‘Gwacheon Prugio Ortus (192 households)’, etc. 47.8390 people requested three complexes Including the special offer, 570,000 people requested. 11,4955 people flocked to the top of the ‘Gamil Prugio Markber’, which is sold in the Gamil district of Hanam. In Sejong City, upon entering Goundong’s M8 block (seating area 1-1), 25,910 people applied for the first priority of Hallym Full Ever, and about 250,000 people applied for the non-priority of ‘Sejong Leader Spore’, an apartment residential-commercial in Naseong-dong.
◆ Illegal resale of sales rights, subscription ban for 10 years … Relaxation of special income conditions
Starting in February of next year, if you violate the restrictions on resale rights of sale, you will not be able to subscribe to an apartment for 10 years. Anyone who violates or mediates the resale restriction will be restricted from ten year tenant status from the day the violation is discovered. If the tenant’s qualifications are restricted, subscriptions cannot be made through the subscription system.
As previously announced, the income requirements for newlyweds and the first special supplies in their lives will be relaxed. Under current regulations, those eligible for the Newlywed Special Offer are subject to income requirements and 100-120% of the median income of urban workers. Starting next year, 30% of the supply of private housing will be allowed up to 140% of the average income of urban workers. For the honeymoon special supply, 120% of the median income applies as before at 70%, and the relaxed rules apply only at 30%. Even in the first special supply of life, the income requirement is lowered to 160% for 30% of the supply.
◆ Reflects up to 90% of the published price and the market price … Partial reduction of property tax, limited to 3 years
The government has developed a plan to continue raising the price of listed properties to 90% of the market price. As such, the property tax (property tax + comprehensive real estate tax) that people who own a house or land must pay will gradually increase starting next year. Currently, the average price of 900 million won or more is 72.2% and the price of less than 900 million won is 68.1%. These quoted prices will increase to 90% of the market price for 5 to 10 years. When the public price increases, the property tax and health insurance premium burden (local subscribers) increases.
In addition, the government has decided to reduce the property tax rate by 0.05 percentage points by 2023 for houses with a public price of 600 million won or less. The amount of the tax reduction depends on the published price of the home. An owner with an official price of 600 million won can receive a maximum tax reduction of 180,000 won. Up to 30,000 won will be reduced for those below the official price of 100 million won.
◆ Property tax increased as public announcements increased
As the disclosure price reflected by the index increases, the tenure tax is expected to increase. As a result of calculating the annual tenure tax for the main apartments in Seoul, a landlord’s tenure tax can increase up to five times. An owner who owns 84㎡ of the exclusive area of the Raemian Daechi Palace in Daechi-dong with a market price of approximately 3.3 billion won pays 9.7 million won in property taxes this year. As the reflection rate, which is now 71%, increases year over year, the tenure tax due in 2022 doubles to 19.08 million won. In 2025, when the reflection rate reaches 90%, the amount of the tax will increase almost five times to 4.754 million won. During the same period, the tax amount for an owner who owned 84 square meters for Banpozai also increased from 10.82 million won to 32.19 million won.
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