Gangnam-gu 13.83% Best in Seoul
Yangyang 19.86% surprise, No. 1 in the country
Myeong-dong Nature Republic 260 million per ㎡
“The increase may be passed on to the rent”
The publicly announced land price of the Seoul Standard Land next year will increase significantly regardless of the division between Gangnam and North Korea. Of the 25 autonomous districts in Seoul, 16 recorded double-digit growth rates. As the publicly announced land price jumps, the burden on the holding tax is expected to increase. In the case of the first to fifth places in the official standard land, the ownership tax for next year will increase by 30 to 40 percent from this year. For some shopping malls, the holding tax is expected to rise closer to the upper limit (50%).
According to the Ministry of Land, Infrastructure and Transport on the 23rd, Gangnam-gu (13.83%) recorded the highest increase rate of publicly announced land prices next year in Seoul. It is interpreted by the influence of development projects such as Hyundai Motor Company’s new global business center (GBC) construction and Yeongdong-daero underground space development project. Seocho-gu (12.63%) and Songpa-gu (11.84%) also showed high rates of increase.
Most of the non-Gangnam areas also recorded double digits. Yeongdeungpo-gu, which embraces Yeouido, climbed 12.49%, the third highest in Seoul. Gangseo-gu, which has high accessibility to Yeouido, rose 12.39%, and Seodaemun-gu (11.50%), which is active in redevelopment projects, also saw a huge jump in public land prices next year following this year. In addition, places where maintenance projects and transportation network expansion are in progress such as Gwanak-gu (11.40%), Seongdong-gu (11.33%), Geumcheon-gu (11.28%), and Yongsan-gu (11.29%) also rose a lot.
By city and province, Sejong (12.38%) rose the most, followed by Seoul (11.41%), Gwangju (11.39%), Busan (11.08%), and Daegu (10.92%). In Sejong City, both house prices and land prices have risen significantly due to the issue of capital relocation. The lowest growth rate for next year was 7.23% in Chungnam. By city, county, and district, Yangyang-gun, Gangwon, recorded 19.86%, ranking first in surprise. As the surfing culture spread and development became active, land prices increased a lot.
The Ministry of Land, Infrastructure and Transport has been steadily raising publicly announced land prices for the past four years. The rate of increase in the publicly announced land price of national standard papers from 4.94% in 2017 rose to 6.02% in 2018, followed by 9.42% in 2019 and 6.33% this year. Next year, it will increase 10.37%, the largest in 14 years. In particular, Seoul, which surged 13.87% in 2019, will record 11.41% next year, the second highest increase in the last decade.
As a result of a simulation by Woo Byung-tak, manager of Shinhan Bank’s Real Estate Investment Advisory Center (tax accountant), targeting the top 1-5 standard sites, it is analyzed that the ownership tax will increase by 30-40% from this year. The owner of the No. 1 Nature Public site in Myeong-dong, Jung-gu, Seoul (26.5 million won per 169.3 m²·m²) is expected to pay a holding tax of 23.149 million won next year. This is a 27.15% increase from this year. The second most expensive Myeongdong 2-ga Woori Bank site (392.4m2·m2/KRW 199 million) is subject to a holding tax of 636.36 million won next year. It is a 38.15% increase from this year. The third-place Chungmuro 2-ga Uniqlo site (KRW 191 million per 300.1㎡·㎡) is also required to pay a holding tax of 436.45 million KRW, a 30% increase from this year.
Sim Gyo-eon, a professor of real estate at Konkuk University, pointed out that “it is not desirable for the tax burden to increase rapidly in a difficult situation for both store owners and tenants due to the Corona 19 incident.” “There is a possibility of side effects such as the collapse of the business district.”
Reporter Jinseok Choi/Hyunjoo Jang [email protected]
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