People’s Power Promote’Partial Amendment to Real Estate Price Disclosure Act’
Reflecting “tax complaints due to soaring public land prices”.. Realization is unknown
[서울=뉴스핌] Reporter Park Woo-jin = Last year, a bill was proposed to limit the public price increase rate to a maximum of 10% per year and a maximum of 30% for five years.
Published prices have risen significantly in recent years due to the government’s goal of realizing the stated prices and the impact of rising house prices. Dissatisfaction is arising as the tax burden of individuals including the elderly and retirees without income increases, and welfare service benefits decrease.
◆Increased tax burden due to public price realization and rising house prices
According to the National Assembly on the 3rd, 10 members, including Rep. Park Sung-joong, proposed the’Partial Amendment of the Real Estate Price Disclosure Act’, which limits the rate of increase in public prices.
The amendment made it possible to set the rate of increase in the publicly announced land price of standard land and the price of standard housing and apartment houses within the range of not exceeding 10% compared to the previous year, and the sum of the increase rate for the last five years does not exceed 30%.
This provision was inspired by the case of New York City, USA. In order to prevent a sharp increase in the published price, New York City prohibits the increase of more than 6% in one year and more than 20% in five years, except for new construction and repair, when determining the assessed value.
The revised bill was initiated with the aim of easing the tax burden that has rapidly increased due to the realization of the government’s published prices and rising house prices. The published price not only serves as an indicator of real estate prices, but is also used as a standard indicator for various taxes such as comprehensive real estate tax, property tax, gift tax, health insurance premiums, basic pension, and development charges. The steep increase in the published price increases the burden of taxes and insurance premiums.
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| Real Estate Listing Price Realization Rate Target by Year and Type [자료=국토부] |
In addition, the government announced a’public price realization plan’ last month that raises the published price realization rate (published price versus market price) of all types of real estate such as apartments, detached houses, land, etc. to 90% over the next 15 years. The fair market price ratio multiplied by is expected to increase from 90% this year to 95% next year, so the tax burden will increase further.
This year, the rate of increase in the publicly listed apartment prices nationwide recorded 5.99%. However, in some regions, it also recorded a sharp increase, including 14.75% in Seoul and 14.06% in Daejeon. In addition, the rate of increase in the publicly announced land price of national standard land next year was 10.37%, the highest in 14 years since 12.40% in 2007.
The number of recipients of the 2020 final tax, which was notified last month, recorded 744,000, an increase of 149,000 (25%) from the previous year, and in areas where house prices surged, the tax burden has nearly doubled, leading to a movement in tax resistance. If the publicly announced land price continues to surge, such dissatisfaction is expected to continue in the future.
Rep. Park Seong-joong said, “The bill aims to achieve stabilization by providing a safeguard to protect taxpayers from the recent rapid rise in taxation.”
◆A bill that conflicts with the stated price realization rate target…Market consensus required
It doesn’t seem easy to pass the amendment. If the bill is passed, it is inevitable to amend the target of the government’s public announcement rate, but it is expected that the Democratic Party, the ruling party, which occupies the majority of the parliamentary seats, is expected.
Currently, the government’s plan for real estate price realization was created when the Minister of Land, Infrastructure and Transport was able to’establish a plan to reflect appropriate prices’ through the revision of the Enforcement Decree of the Real Estate Price Disclosure Act last October. If the bill is passed, the content of the bill, which is higher than the enforcement decree, must be followed.
Even if the bill is not passed, the government and the ruling party may adjust the target of the stated price realization rate. If the detailed burden continues to increase due to the public price hike, complaints and voices for the adjustment of the public price realization rate will continue, and the government will have no choice but to revise the target to alleviate complaints.
Last month, when the government announced a roadmap for realizing the official price, it tried to alleviate dissatisfaction by lowering the property tax rate for one household with less than 600 million won. In addition, while checking the progress of the actualization rate every three years, he mentioned the possibility of supplementing the plan if necessary.
It is pointed out that the government and the market should agree on the target of the stated price realization rate. The official price realization rate is the direction to be taken for market transparency, but if there are complaints due to tax burden, etc., there will be a setback in achieving the goal.
Young-jin Ham, head of Jikbang’s Big Data Lab, said, “The government and the market need to adjust the speed of realization of the published price by coordinating the government and the market.”