Pension fee of 900,000 won for a house in Seoul 5 years later



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The possession tax bomb is not over
Health insurance fee for an owner in Seoul, more than 1 million won for 5 years ↑

Gangnam apartment complex seen from Lotte World Tower, Songpa-gu, Seoul / Photo = Yonhap News

Gangnam apartment complex seen from Lotte World Tower, Songpa-gu, Seoul / Photo = Yonhap News

The government’s policy of increasing public prices was found to significantly increase health insurance premiums and property taxes due to the aftershock. For an owner in Seoul, the construction fee is expected to increase by more than 1 million won over the next five years. If health insurance premiums rise sharply, it is especially a blow to retirees whose incomes are not variable. This is the reason for the growing clamor among retirees: “Is it a big mistake to save money from my life and buy a house?”

Homeowner Dogok Rexle 1 5 years later, construction fee 4.65 million won

A retiree who owns an apartment in Dogok Rexle in Gangnam, Seoul (with an exclusive area of ​​120m2 and a market price of 2.7 billion won) and receives a monthly pension of 900,000 won. He will pay 350,000 won a month this year. It’s 360 million won per year.

However, the health care fee for Mr. A will increase to △ 3.69,000 won next year △ 3,858,000 won in 2022 △ 4.2 million won in 2023 △ 4,395,000 won in 2024 △ 4,658,000 won in 2025. This is an increase of 1,057,000 won (29.4%) over the next five years. In 2025, 43% of pension income will be lost to health insurance alone. This is the result of the estimation under the premise that the construction fee rate will increase by 3.2% each year and the housing market price will increase by 5% on average per year. Mr. A’s possession tax, like the property tax and comprehensive property tax, also increased from 9.18 million won this year to 343.9 million won in 2025.

Health Insurance Corporation / Photo = Yonhap News

Health Insurance Corporation / Photo = Yonhap News

B (900,000 won monthly pension income), who lives in an apartment with a market price of 1,500 million won in Mapo-gu, Seoul, also has an annual health care fee of 330,000 won this year to 4,086,000 won in 2025, increasing more than 1 million won.

The first reason for the increase in health insurance premiums is the so-called ‘Moon Jae-in Care’, a measure to strengthen health insurance coverage. Moon Jae-in Care is a policy to provide health care for all medical services. Increasing the health insurance rate is inevitable because it requires enormous resources. In fact, the Ministry of Health and Welfare announced that it will increase the health insurance rate by 3.2% every year in the ‘Comprehensive Plan for National Health Insurance’ last year.

Additionally, local health insurance underwriters, such as retirees and the self-employed, have even increased health insurance premiums from public prices. Unlike workplace underwriters who only see income when they collect the health insurance fee, local underwriters also reflect their assets. Homeowners insurance premiums are based on the published home price. However, as the government announced that it would significantly increase the official price, an increase in health insurance rates became inevitable. On day 3, the Ministry of Lands, Infrastructure and Transportation announced on day 3 the ‘Real Estate List Price Realization Plan’ that will raise the market price reflection rate (realization rate) of the published house price from 54 to 69% this year to 90% in 5 to 10 years. It means that the policy to increase the public price was promoted by Moon Jae-in Care.

Mid- to Low-Price Homeowners Are ‘Successful’ Too

When the government announced the plan to specify the listing price of the properties, it assured that “even if the listing price rises, it will hardly affect the construction rate.” As a basis, I heard that the property deduction benefit increases when calculating health insurance for local subscribers. The property deduction, which is currently 5 million to 12 million won, will increase to 50 million won starting in 2023. However, as a result of estimating the construction fee, it was found that houses priced at market of more than 1 billion won was insufficient to reduce the burden of construction fees by deducting KRW 50 million.

There is a possibility that the dry matter increases more than the simulation. This is because the price of the housing market in Seoul and the metropolitan area can increase more than 5% per year on average. According to the Korea Appraisal Board, the median sales price of apartments in Seoul has increased by 10.2% annually over the past five years (October 2015 to October this year). For the 120 m2 Dogok Wrestle, whose market price has increased recently, the official price has increased from 1.2 billion won in 2018 to 1.97 billion won this year. For local subscribers living in this apartment, the construction fee increased 840,000 won in 2018-2020 alone.

Mid- to low-end homeowners are relatively less expensive, but they also suffer. For those who own an apartment with a market price of 600 million won and have no income, the construction fee is expected to increase from 1998,000 won this year to 2,435,000 won in 2025. That is 437,000 won in five years. Homeowners with an official price of 600 million won or less receive property tax cuts. However, health care fees do not have these benefits, so you have to bear the increased burden.

An official from the Korean Federation of Retirees said: “Even retirees who have earned a home often expect their income to live on pensions that are small. Even if the price of the house increases, the income does not increase.” “Is it mine?” He criticized.

The consequences of the rise in public prices do not stop there. The published price is used not only for property taxes and construction fees, but also for the payment of the basic pension, the basic life security system and the national grant. There are expected to be cases where homeowners whose public prices go up a lot will be deprived of their welfare ratings after standing still. In the case of the current basic pension, 16,000 existing beneficiaries lost their benefits last year due to the increase in the published price.

“There is a reasonable reason to set the official price below the market price,” said Hong Ki-yong, a professor in the Department of Business Administration at Incheon University. “Unlike the official price established once a year, the market price changes from time to time. It is difficult to know the exact price of the house,” he said. He noted that “if you ignore all these points and implement a policy that you must raising the quoted price to the market level, the secondary effects will inevitably increase. ”

Reporter Seo Min-joon [email protected]

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