Assessed values of houses too low in 8 areasAmid a drive to move assessed values closer to real-world prices, the government has requested eight districts in Seoul to make changes to their housing assessments.
It found that local district figures are not lining up with national government calculations.
The Ministry of Land, Infrastructure and Transport said Wednesday that the on-year rate of change of assessed values for 456 single-family houses in the districts of Jongno, Jung, Yongsan, Seongdong, Seodaemun, Mapo, Dongjak and Gangnam in Seoul differed from the rate of change determined by the government’s standard assessment by 3 percentage points.
In Korea, the central government and the Korea Appraisal Board (KAB) calculate standard assessed values for representative single-family houses. The prices serve as a benchmark for local authorities to calculate values.
The assessed values as determined by the Yongsan District were 7.65 percentage points lower than the government standard. Gangnam District assessments were 6.11 percentage points lower.
Assessed values are used to calculate property taxes.
The ministry said it found four types of errors: incorrect selection of standard assessed housing prices; incorrect evaluations of housing characteristics; arbitrary changes; and the altering of standard assessed values.
The ministry added that it did not find significant deviations outside the eight districts mentioned. It said it will conduct data analysis and could make changes in other regions.
In response to recent criticism that standard assessed values determined by the government are too high and could lead to deviations, the ministry said the assessments need to reflect reality.
“Considering recent housing price increases and relatively undervalued real estate, there was criticism that [these properties] had an advantage in taxation compared to housing owned by the average person,” the ministry said in a statement.
“The relatively undervalued assessed prices were raised to close the gap with real prices, normalize past irrationalities and achieve fair taxation.”
The recent announcement follows Minister of Land Kim Hyun-mee’s speech on April 2, when she vowed to normalize assessed housing values and maintain the policy direction.
Critics say the standard assessments by the government and the KAB are inaccurate as they do not follow global standards and rely on inadequate calculation methods.
Assessed housing values will be finalized by April 30.
BY CHAE YUN-HWAN [email@example.com]