Explore the latest trends in
2024 South Korean real estate, including the rise in standard single-family home prices by 1.96% and standard land values by 2.93%. Learn how these changes impact property taxes and discover strategies for property owners and investors to navigate this evolving landscape.
Regional Variations in Single-Family Home Price Growth
Price Increase by Region
Seoul: 2.86% increase, the highest nationwide
Yongsan-gu: 3.7% increase due to redevelopment potential (highest in Seoul)
Gangnam-gu, Seongdong-gu, Dongjak-gu, Mapo-gu: Over 3% increase
Guro-gu, Geumcheon-gu, Gwanak-gu: Modest increases between 1.86% and 1.99%
Gyeonggi Province: 2.44%; Incheon: 1.7%
Jeju: -0.49%, the only region with a decline
Seoul’s price growth has been driven by areas with strong development potential and advantageous location factors. Yongsan-gu, in particular, benefited from major projects like the Hanam New Town development and GTX-B railway line. Conversely, Jeju experienced a decline due to weak tourism recovery and population stagnation.
Standard Land Value Trends: Concentration in Metropolitan Areas
Regional Growth Rates
Seoul: 3.92%, the highest nationwide
Gyeonggi Province: 2.78%; Daejeon: 2.01%; Busan: 1.84%
Jeju: -0.26%, reflecting a downturn
Land value growth has varied based on factors such as development potential and infrastructure improvements. While Seoul recorded the highest growth due to its prime location, Jeju’s land values fell, reflecting economic challenges.
Impact of Price Increases on Property Taxes
Changes in Property Tax for Single-Family Homes
Northern Seoul: For single-family homes valued at 1 billion KRW, property taxes are expected to rise by around 100,000 KRW (2.67% to 5.04% increase).
Southern Seoul: For homes valued above 2 billion KRW, taxes could increase by over 1 million KRW.
While the tax burden will rise, the impact is moderated by the government’s decision to maintain price reflection rates at 2020 levels, limiting drastic tax increases.
Strategies for Property Owners and Investors
Recommendations for Property Owners
Review and Submit Feedback on Appraised Prices:
Explore Tax Reduction Strategies:
Single-home owners can take advantage of senior citizen tax credits and long-term ownership deductions.
Registering properties as rental homes may offer exemptions from comprehensive real estate taxes.
Tips for Investors
Caution in High-Growth Areas: Rising tax burdens may reduce short-term returns.
Opportunities in Declining Regions: Areas like Jeju, with falling appraised prices, could provide lower entry barriers and potential for long-term appreciation.
Real Estate Appraisal and Tax Interconnectivity
Appraised values play a pivotal role in determining the following taxes:
Capital Gains Tax: Based on the profit margin from property sales.
Inheritance and Gift Taxes: Calculated using appraised values as the baseline.
Acquisition and Registration Taxes: Applied during property transactions.
Owners of high-value properties (appraised over 900 million KRW) may experience a notable increase in comprehensive real estate tax liabilities, necessitating careful tax planning.
Key Upcoming Dates
January 1, 2024: Effective date for appraised values.
Until January 7, 2024: Public feedback period on appraised values.
January 24, 2024: Final announcement of standard single-family home and land appraisals.
March 2024: Appraised values for apartment complexes to be announced.
Conclusion: Managing Rising Appraisal Values
Standard single-family home and land appraisals serve as critical benchmarks for property valuation and taxation. Owners and investors should proactively assess the potential impact of rising appraisals and implement strategic measures to mitigate tax burdens.
For more detailed information, visit the Ministry of Land, Infrastructure, and Transport’s official property appraisal system (www.realtyprice.kr).
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