March 01, 2006 ¤Ñ The Korean government announced yesterday the new standard land prices for 481,000 plots, totaling 393 acres, around the country, raising those prices by just under 18 percent on average.
The increases will be used by local governments to set standard prices on all land in their jurisdictions. The standard prices are the basis for taxing private land sales.
The Roh administration earlier said it wanted to bring the standard price up to the level of market prices in a bid to increase tax revenue and to fight real estate speculation.
The Ministry of Construction and Transportation said yesterday that it had completed its most recent six-month job of assessing the prices of the plots, which it said were representative of real estate values in the areas around them.
The annual announcement will lead to announcements of detailed standard values in all areas of the country by local administrations; those figures will be released next May.
Those standard prices have been increasing dramatically every year since 2002, by an average of more than 15 percent annually. During the same period, the Construction Ministry said, market prices of land have risen by only about 3-4 percent annually.
Last year, when the ministry boosted the prices by 15.1 percent, it said that it had brought standard prices up to about 91 percent of the transaction value of the real estate in question.
That suggested to some observers that this year's increase may have put the standard prices at above the market value. The ministry refused to release data this year on just how close standard and market prices have become.
"Only about 3 to 4 percent of the entire stock of land in Korea is bought and sold every year, which makes it difficult for us to figure out actual market land prices in many regions," one official at the ministry's real estate team said.
"I don't know how such a comment that last year's official price was 91 percent of the market price was calculated last year," he continued.
by Jung Ha-won <hawon@...>