Gyeonggi Province to Rectify Individual Announced Land Prices for 194,000 Properties

[Suwon Ilbo=Park No-hoon, Reporter] Gyeonggi Province is launching a comprehensive rectification of 194,867 properties this month to address the so-called price reversal phenomenon, where individual announced land prices exceed individual house prices (the combined value of land and building).

Gyeonggi Province announced on the 14th that it will implement the "2022 Comprehensive Rectification of Housing and Land Characteristic Mismatches and Price Reversal Phenomena."

Price reversal phenomena occur when departments responsible for individual announced land prices (land division) and individual house prices (tax division) investigate land characteristics such as proximity to roads, land elevation, and shape differently.

For example, based on January 1 of last year, the individual house price (land plus building) for a residence at B location in City A was announced at 31.2 million won, while the individual announced land price (land only) was 138.99 million won (7.02 million won per square meter), meaning the land value alone was approximately four times more expensive than the combined value of land and building.

In Gyeonggi Province, a total of 194,867 properties as of July were identified as requiring rectification, including 46,798 cases with characteristic mismatches and 148,069 cases with price reversal phenomena.

The province plans to first verify the appropriateness of standard house selection and identify any errors in housing characteristic surveys for all 194,867 properties by the end of this year.

After that, the province will notify cities and counties of the verification results, and they will proceed to rectify characteristic mismatches and price reversal phenomena through deliberation by real estate price announcement committees.

A provincial official stated, "Individual house prices and individual announced land prices are standard prices used in assessing local taxes such as property tax and acquisition tax, as well as national taxes such as comprehensive real estate tax," and added, "We expect this rectification to realize fair tax justice."

Meanwhile, the province was the first local government nationwide last year to establish a rectification plan for characteristic mismatches, implementing comprehensive rectification for 304 cases with characteristic mismatches and 1,488 cases with price reversal phenomena.

Additionally, the province has been continuously proposing improvements to the real estate price announcement system to the central government, including delegating authority for standard real estate investigation and evaluation and individual real estate guidance and supervision to provincial governors, and granting access rights to attached land during individual house price surveys in order to address systemic issues in the real estate price announcement system.