Don’t invite tax resistanceAlthough exact data is yet to be released on the filing of appeals over reevaluation of housing appraisals, the count is expected to exceed last year’s 37,000 cases and the record high of 56,000 in 2007. Complaints have been filed not just from affluent neighborhoods in Gangnam, southern Seoul, but also from Sejong City under the ruling party mayor.
Joint research by Seocho district in southern Seoul and Jeju Province governments underscored how random and unreliable the state appraisal evaluation was. The appraisal value of homes in Seocho district rose 13.5 percent on average, but many multi-residential estimations jumped by twice or more from last year. Due to lack of strict criteria, the estimate depended on the number of transactions. As a result, if there was no trade in a certain area, the value did not go up. Estimates of two units on the same floor and building of an apartment complex differed by more than 30 percent. Some were even appraised 200 million won ($179,000) more than the market value. It is outrageous to levy taxes on the people based on such reckless evaluation.
The government’s reaction to mounting complaints was slow. The ministry of land must immediately work on making fixes to prevent any incorrect appraisals. But it casually said the evaluation was “appropriate” without disclosing how the calculation came about. Seocho district office repeatedly inquired about the basis for the measurements, but the ministry merely responded that actual trade price does not become the criteria for appraised value. People are questioning if they really can get fairer evaluations from their appeals.
When questions arose about a lack of expertise, the ministry decided to have the appraisals reviewed by outside experts separate from the government-run Korea Real Estate Board. The government plans to have the appeals reviewed by a committee with 30 auditors with at least three years of experience in property appraisal.
But how such a small number of manpower can cover thousands of cases by the April 29 deadline is questionable. The government plans to share the data over the past 20 years with the outside committee, but it is meaningless to look at the data that has been compiled without actual field studies. Of the appeal cases last year, only 2.4 percent had been reassessed. If the government does not want to face strong tax resistance, it must take more time to thoroughly reexamine the appraisals so that taxpayers can be convinced.