The government will unveil revised plans for next year’s public price assessments, including the realization rate of public prices, on the 13th. The Ministry of Land, Infrastructure, and Transport is holding a public hearing this morning at the Seoul Gangnam branch of the Korea Real Estate Agency to discuss improvements in real estate price disclosure policies. Park Cheon-gyu, head of the Housing and Real Estate Research Division at the Korea Research Institute for Human Settlements, will propose freezing the publicly announced prices for apartments, single-family homes, and land at this year’s levels for next year.
Initially, according to the real estate public price realization plan, next year’s realization rate was expected to reach 80.9%. However, considering tax burdens and other factors, it was decided to keep it at the same level as this year. Consequently, the realization rate for apartment prices compared to market values will be 69% for the fourth consecutive year. Similarly, the rates for land and single-family homes will also be frozen at 65.5% and 53.6% respectively, with only the market fluctuations of this year being reflected in the announced prices.
Real estate public prices serve as the base for property and comprehensive real estate taxes and are used as foundational data for 67 administrative systems, including health insurance premiums and basic pensions. The current real estate tax system sets the tax standard by multiplying the realization rate by the fair market value ratio. Real estate price realization began in 2020 during the Moon Jae-in administration, with a staged increase plan to reach 90% of market values by 2035. However, the rapid surge in housing prices revealed its issues.
Subsequently, under the Yoon Suk-yeol administration, the realization rates were reverted, but the goal of realization remains in place under the Real Estate Price Disclosure Act. After gathering public opinion at the hearing, the Ministry of Land plans to convene the Central Committee on Real Estate Price Disclosure in the afternoon to review and decide on the government’s plan for next year’s price realization rate.
Jeong Jae-won, Director of the Real Estate Evaluation Division at the Ministry, stated, “We judged it necessary to maintain the current level for next year’s realization rate,” adding that “We will consider how to set the annual market reflection rate in the medium to long term through policy research and other efforts.”
[Photo Source: Yonhap News / Provided by the Ministry of Land, Infrastructure and Transport]
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