Officially appraised value of real estate to rise sharply next year

Dec 23, 2021, 09:13 am

AsiaToday reporter Lee Chul-hyun

The officially appraised value of a standard detached house, the basis for calculating next year’s state-set price of a detached house, will rise by 7.36 percent from this year. This is the second highest growth rate ever since 2019 with 9.13 percent. The standard public land price, the basis for calculating individual land price, also rose by 10.16 percent in average nationwide, recording a double-digit increase for two consecutive years.

As a result, property tax as well as health insurance premiums will increase significantly, casting shadow over the public sentiment on real estate prices. In response, the government has decided to come up with measures to ease the burden on single-homeowners by March next year.

The Ministry of Land, Infrastructure and Transport said on Wednesday that it will begin hearing opinions starting Thursday on the officially appraised value of standard lands and detached houses for next year.

The target standard land is 540,000 out of 34.5 million lots nationwide, while the target standard detached house is 240,000 out of 4.14 million lots nationwide. Once the value is confirmed, the local government determines the individual land price and price of a detached house based on it.

The officially appraised value of standard land for next year has increased nationwide by 10.16 percent. This is the second consecutive year of double-digit growth following this year with 10.35 percent. It is the first time since 2007 that it marked a double-digit growth in a row.

By region, Seoul rose the most with 11.21 percent, followed by Sejong with 10.76 percent and Daegu with 10.56 percent. Busan, Gyeonggi and Jeju, Gwangju and Daejeon followed.

The officially appraised value of a standard detached house rose by 7.36 percent next year, higher than this year’s 6.8 percent. This is the second highest figure since the survey began in 2005. The highest figure was recorded in 2019 with 9.13 percent.

The price for Busan rose to 9.96 percent from 8.41 percent, and the price for Jeju nearly doubled to 8.15 percent from 4.62 percent. The government-set value of a standard detached house in Sejong decreased to 6.69 percent from 6.94 percent due to the continued drop in house prices this year.

The reason behind the rise is because the sale price has risen sharply this year, and the government raised state-set home prices by 2.1 percentage points from this year’s 55.8 percent. Next year’s government-set home price for standard detached house will rise to 57.9 percent.

However, there are large differences between expensive homes and cheaper ones. For standard detached houses worth under 900 million won rose 5.36 percent, while those valued between 900 million won and 1.5 billion won rose 10.34 percent and those over 1.5 billion won rose 12.02 percent. The higher the price, the higher the rise, as the government announced its ‘realization plan’ of the officially appraised value of real estate last year, where it decided to speed up the realization of its plan on expensive homes.

As the officially appraised value of standard land and standard detached house rises next year, the property tax of land and detached house is expected to rise as well.

In response to the taxation controversy, the government decided to come up with a tax relief plan jointly with related ministries in March next year.

#officially appraised value #real estate #property tax