“The 稅 bomb is due to the skyrocketing house prices?” Excuses from the Ministry of Land, Infrastructure and Transport

Input 2021.03.18 06:00

As the Ministry of Land, Infrastructure and Transport announced the public housing price and the estimated amount of ownership tax this year was calculated one after another, it is being pointed out that the statistics released by the government are wrong. The Korea Real Estate Agency, which the government uses as an indicator of housing prices, reported that last year house prices in Seoul rose 2.68%. This is because the rate of increase in the official price in Seoul was 19.91%, which is 7.6 times different from the statistics on the increase in house prices. This rate of increase is the highest since the 22.7% recorded at the time of the Roh Moo-hyun administration in 2007.

Real estate experts pointed out that it was not yesterday and today that the reliability of the Korea Real Estate Agency’s statistics rose on the cutting board, but if it continues, it could lead to social problems as the reliability of the tax policy becomes an issue.

According to the construction and real estate industry on the 18th, the controversy over whether the tax was calculated properly is rising as the housing ownership tax, which even one homeowner must pay, has soared. Seocho-gu and Jeju-do, Seoul, have already announced their plans to propose to the government to freeze the official housing prices and to do a full re-examination.

Even local governments have doubts about the official price of apartment houses by the Ministry of Land, Infrastructure, and Transport because the official price calculation was made in a blink of an eye, and when the statistics presented by the government are matched, the front and back are not correct.

First of all, according to the Ministry of Land, Infrastructure and Transport, the official price of apartment houses nationwide in 2021 rose an average of 19.08%. The published price in Seoul rose 19.91%. However, it was estimated that the actual ownership tax burden of homeowners was more than that.

As a result of a simulation by Yang Gyeong-seop of Onse, a tax accountant of the tax group, selected representative apartments across Seoul, the burden of ownership tax this year has increased by 30-50% from last year. Last year, the ownership tax of the 84-square-meter house owner in Eunma, Gangnam-gu, Seoul was 5.38 million, 55.28 million won, but this year’s ownership tax rose 48.9% to 8,08.64 million won. The increase rate of the ownership tax was 48.9%.

Mapo Raemian Prugio, Ahyeon-dong, Mapo-gu, Seoul The owner’s ownership tax of 84 square meters last year was 2.674.4 million won, but this year it is set to pay 3.75 million,883 won. The increase rate of the ownership tax recorded 52.0%.

As the official price jumped sharply, the Minister of Land, Infrastructure and Transport Byun Chang-heum also paid the tax. Minister Byeon owns a 129.73m2 apartment in Bangbae-dong, Seocho-gu, Seoul, because the official price of this apartment jumped from 693 million won to 950 million won and became subject to a tax levied on more than 900 million won. Nevertheless, the Real Estate Agency analyzed that apartment prices in Seocho-gu rose 0.81% last year. However, since Minister Byeon has held it since 2006, the long-term retention special deduction is applied, and the actual tax amount is estimated to be only 8550 won.

Mapo, Yongsan, and Seongdong-gu are not the only high-priced apartment complexes in Gangnam, Seocho, and Songpa. The ownership tax of owners of 84 square meters of exclusive area for Lotte Castle Noblesse in Jeonnong-dong, Dongdaemun-gu, Seool, rose 53.9% from 123,48 million won last year to 1.9 million,592 won this year.

As the ownership tax increased sharply, the arrow was directed at the Ministry of Land, Infrastructure and Transport. It is said that in a situation where the house price has risen, the realization of the quoted price has been unreasonably increased. In October of last year, the government and the ruling party announced the’Public Price Realization Roadmap’ to raise the published price realization rate (disclosed price/market price) to 90% by 2030 and applied it from this year.

However, the Ministry of Land, Infrastructure and Transport said it was unfair. The Ministry of Land, Infrastructure and Transport said, “In this year, the market price of apartments and other apartments has increased so much last year, rather than the roadmap, so the public price has increased that much.” This means that the public price has not been raised sharply.

Real estate experts view the explanation of the Ministry of Land, Infrastructure and Transport as a self-defeating number of government statistics credibility. First of all, this is because it is different from the statistics of the Korea Real Estate Agency, which the government uses as an index of housing prices.

According to the Korea Real Estate Agency, apartment prices in Seoul rose 2.68% last year. This means that the apartment price of 1 billion won has risen to around 1,026 billion won. However, the rate of increase in public prices in Seoul announced by the government is 19.91%, which is 7.6 times the rate of increase in apartment prices according to statistics from the Real Estate Agency.

Ji-hae Yoon, senior researcher at Real Estate 114, said, “The fact that the realization rate was raised by only 1.2 percentage points, but the official price rose by nearly 20% means that the actual market price increase rate reached 18 to 19% last year.” It is said that there is an ambiguous part of how exactly it is calculated from the standpoint of experts only with the formula disclosed by the government.”

Such controversy is not expected to be resolved easily. This is because the published price of real estate is used as the basis for more than 60 types of taxes, semi-taxes and charges, such as health insurance premiums and basic old-age pensions, in addition to property taxes and taxation taxes.

Go Jun-seok, adjunct professor at Dongguk University’s Graduate School of Law, said, “From the public standpoint, it is inevitable that the realization rate is directly connected to the tax burden and acts as a real burden.” “It’s hard.”

Some believe that there is a possibility that tax resistance, such as administrative and unconstitutional lawsuits, may lead to tax tribunalism over the announcement of this published price.

“There is no clear basis of the law for the published price, but there is no public standard or guidelines, so it is inevitable to be vulnerable to criticism that it is against tax legalism,” said Yelim Kim, a lawyer specializing in real estate. “If a request for unconstitutional trial is filed by the Constitutional Court, it is highly likely that it will be cited,” he said.

Attorney Kim Ye-rim also said, “Unless there is a clear basis for calculating the published price, which is the tax base, in a situation where the government may have miscalculated (realization rate), it will be difficult for the government to defend it. “The court’s judgment can be different depending on how much of it is disclosed,” he said.

From the 29th of next month, the government has decided to disclose some of the calculation grounds, such as housing characteristics and price reference data, but controversy may continue until it is fully disclosed.