RISE IN HOUSING PRICES AND TAXES

[Anchor Lead]

On the back of a recent rise in housing prices, this year's official prices for apartments and other types of multi-unit houses have gained by an average of 19.08 percent across the nation. All eyes are on how much taxes will go up this year, as property holding taxes are calculated based on the official prices, which are announced on Tuesday.

[Pkg]

Due to a growth in official property prices, more than 520,000 apartments are estimated to be worth over 900 million won, which is the threshold for imposing the comprehensive real estate holding tax. The number is up nearly 70 percent from last year and accounts for 3.7 percent of all apartments nationwide. Those owning multiple homes will have to face greater holding taxes. The actual transaction price of this apartment is 2.95 billion won. The comprehensive real estate tax and other holding taxes on this house will increase by over 7.4 million won in a year. If the owner has another apartment worth 2.15 billion won, the holding taxes will jump by some 70 million won.

[Soundbite] Woo Byung-tak(Shinhan Bank) : "In the case of a multi-home owner, the ceiling for imposing holding taxes is 300 percent, far higher than the 150 percent for single-home owners."

Higher holding taxes are not the only problem. Community-based subscribers to the state health insurance program will either see their premiums increase or lose their status as dependents, as health insurance premiums are calculated based on their wealth. To ease the burden, the government will decrease the percentage of wealth in calculating health insurance premiums by five million won. It will also provide a 50 percent discount on health insurance premiums if they lose the dependent status. Taxes will not increase for those owning single homes that are worth 600 million won or less in official value. It is because the government has lowered the rate of property tax over the past three years in order to ease the tax burden on the working class.
This apartment measuring 84 square meters is located in Gwanak-gu District, Seoul. Its official price was some 500 million won last year and a property tax of 1.05 million won was imposed. Although its official price has risen 19 percent this year, the property tax will be down by 110,000 won. 92 percent of all apartments across the nation and 70 percent in Seoul will benefit from these lower tax rates.