If Land Value Is Higher Than Land Plus Housing Price in the Same Location... Gyeonggi Province Announces Adjustment Plans

[Suwon Ilbo=Reporter Park Nohun] To resolve the so-called price reversal phenomenon where individual public land prices are higher than individual housing prices (land plus house value), Gyeonggi Province is launching full-scale adjustment measures.

Gyeonggi Province announced on the 9th that it will directly conduct verification and implement adjustments starting this month to realize tax justice.

Individual public land prices and individual housing prices (land plus house) are publicly announced prices for individual lands and houses determined by each city and county based on standard lands and standard houses selected annually by the Minister of Land, Infrastructure and Transport and regarded as representative among individual lands and individual houses.

The problem is that different departments handle individual public land prices (land management department) and individual housing prices (tax management department), and since their announcement schedules differ, some conflicts occur.

Characteristics of land such as elevation differences, shape, and relationship to roads are referred to as land characteristics. When the two departments investigate these characteristics differently, characteristic mismatch occurs.

When characteristic mismatch is severe, a so-called 'price reversal phenomenon' occurs where individual public land prices are higher than individual housing prices, which becomes a source of civil complaints.

However, the reality is that each city and county is hesitant to make improvements at once because they are concerned that sudden increases in individual housing prices could create additional civil complaints.

This adjustment is intended to resolve such problems, with certified appraisers belonging to Gyeonggi Province directly conducting verification to adjust individual housing prices.

According to data obtained by Gyeonggi Province from the Korea Real Estate Board in May, there are 45,492 cases of characteristic mismatch in Gyeonggi Province and 148,824 cases of price reversal phenomenon, totaling 194,316 cases.

Accordingly, the province plans to verify the appropriateness of standard real estate selection and whether there are errors in surveying housing and land characteristics for all 194,316 properties by the end of this year.

If adjustments are needed in this process, the province will notify the results to the cities and counties, and the cities and counties will confirm the province's notification results and then undergo deliberation by the municipal and county real estate price announcement committees to adjust characteristic mismatches and price reversal phenomena.

Previously, the province established the Real Estate Fair Price Center Team within the Gyeonggi Province Tax Administration Division in October last year and announced plans to review the appropriateness of announced prices and implement price adjustments through professional certified appraisers.

Once this first inspection is completed, starting next year, when cities and counties request consultations on issues related to individual real estate, the province plans to directly conduct verification and present compromise solutions.

Oh Tae-seok, Director of the Autonomous Administration Bureau of the province, said "These individual housing prices and individual public land prices are standard prices used in calculating local taxes such as property tax and acquisition tax or national taxes such as comprehensive real estate tax," adding "We expect that fair tax justice will be realized through this adjustment."

Meanwhile, the province has continuously proposed improvements to the real estate announcement system to the central government, including delegation of individual real estate guidance and supervision authority to provincial governors, integrated operation of individual real estate (land and house) announcement schedules, and improvement of opinion submission methods for standard real estate.