Have you received your comprehensive real estate tax bill? ‘Maraepu’ is also worth 0 won.

1. You don’t even pay silver?… One-third of those subject to comprehensive real estate tax
2. The apartments were all built, but the house is empty… ‘Malignant unsold units’ exceeded 10,000 households
3. What happened to Sanggye Jugong Complex 5, where the construction company was terminated?

You don’t even pay silver?… One-third of those subject to comprehensive real estate tax

Have you received the comprehensive real estate tax payment notice sent by the National Tax Service? So, you’re in the 2.7% of homeowners. The number of people paying comprehensive real estate tax was cut by one-third from 1.2 million last year to 410,000 this year. It is said to be the largest decline since 2005, when the comprehensive real estate tax was introduced. The tax amount is also reduced by half, from 3.3 trillion won to 1.5 trillion won.

The Ministry of Strategy and Finance explained on the 29th of last month that this was the result of the normalization of the real estate tax system, including a decline in publicly announced prices, an increase in the basic deduction amount, and a reduction in the tax rate. By revising the tax law last year, the government decided not to impose taxes on households with one home if the publicly announced price is less than 1.2 billion won. A married couple who owns a house jointly can receive a basic deduction of up to 1.8 billion won. Due to the decline in house prices, the publicly announced price also fell, further reducing the amount subject to taxation.

This year, 780,000 people had their tax burden reduced. A single householder who owns an 84㎡ apartment exclusively for ‘Mapo Raemian Prugio’ in Mapo-gu paid 850,000 won last year, but did not pay this year. According to the Ministry of Land, Infrastructure and Transport, in August, 84㎡ exclusively for ‘Maraepu’ was traded for 1.8 billion won. This year’s announced price is around 1 billion won. I really benefited from the increase in the basic deduction amount from KRW 900 million to KRW 1.2 billion.

For a homeowner who owns an Eunma Apartment in Gangnam-gu of the same size, the comprehensive real estate tax was greatly reduced from 2 million won to 420,000 won. According to the Ministry of Land, Infrastructure and Transport, 84㎡ exclusively for Eunma was traded for 2.8 billion won in October, and this year’s announced price is around 1.5 billion won. If a house is jointly owned by a couple, the comprehensive real estate tax is 0 won.

It seems like comprehensive real estate tax is still a story from another country. It’s sad that I’m going to lose my glass wallet again this year.

I built all the apartments, but the house is empty… ‘Malignant unsold units’ exceeded 10,000 households

Usually, landlords are recruited through subscription before apartments are fully built. The number of so-called ‘malicious unsold units’ remaining unsold even after completion has exceeded 10,000 households in 2 years and 8 months since February 2021. According to the ‘October Housing Statistics’ announced by the Ministry of Land, Infrastructure and Transport on the 30th of last month, the number of unsold houses as of the end of October was 58,299 households. Among these, the number of unsold units after completion increased by 7.5% (711 households) in one month to 10,224 households.

There were 1,954 households in the metropolitan area and 8,270 households in regional areas, an increase of 6.4% and 7.7%, respectively. Seoul’s unsold homes are no exception with 408 households. At the end of 2021, there were only 52 households, but after peaking at 340 households at the end of last year and 484 households in June, the number has been at the level of 300 to 400 households.

Unsold houses were concentrated in Gangseo-gu (151 cases), Gangdong-gu (96 households), Gangbuk-gu (69 households), and Gwangjin-gu (38 households). Gangbuk-gu’s ‘Kantaville Suyu Palace’, which began moving in in June last year, still has 69 households remaining (as of the end of September). Gangseo-gu’s ‘Hwagok The Live Sky’ (98 households) and Gwangjin-gu’s ‘Gwangjin Park House’ (35 households) have also not moved in. There are many empty houses.

Why not just sell it cheap? There is a lot of opposition from residents who paid full price, and there are concerns that house prices will not rise due to the stigma effect of ‘discount sales = apartments that do not sell.’ Experts warn that the increase in unsold properties means that uncertainty in the real estate market is growing. It is time to ‘pick out the best’ for a house in a good location and at a good price by carefully examining the sales price and the atmosphere of the subscription market.

What happened to Sanggye Jugong Complex 5, where the construction company was terminated?

Sanggye Jugong Complex 5, which was undergoing a reconstruction project in Nowon-gu, Seoul, has recently terminated its construction contract with GS Engineering & Construction, causing noise. GS Engineering & Construction was finally selected as the construction company for this complex in January of this year. On the 25th of last month, a general meeting of owners was held and the decision was made.

The key reason is dissatisfaction with the resident contribution amounting to 500 million won and the 48-month construction period. Sanggye Jugong Complex 5 was a 5-story apartment with 840 households consisting of only 31.98㎡ (11 pyeong). It was planned to be rebuilt with up to 35 floors and 996 households. Considering the 152 public rental units, there is almost no general sales volume.

Due to poor business feasibility, you have to pay more than 500 million won to receive 84㎡ for national flat use. According to the Ministry of Land, Infrastructure and Transport’s actual transaction price disclosure system, this complex has been trading for around 500 million won since August. I think it would be quite a burden since the contribution is higher than the market price. The owners requested a shortened construction period, but the contractor said it would be difficult because there is a school nearby.

In the end, the contract was canceled and the complex was looking for a new contractor. GS E&C announced that it would review lawsuits for return of deposits and input costs, and claims for damages. Construction costs are still high, and there is a possibility that additional costs may arise due to termination and re-selection of the construction company. It seems that finding a new construction company is not easy. When will the new apartments be built?