Only places where housing prices have risen, the official price has risen...Freezing the market reflection rate

■ Host: Um Ji-min Anchor
■ Starring: Land, Infrastructure and Transport Minister Park Sang-woo

* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information. Please specify [YTN New Square 10AM] when quoting.

[Anchor]
The declared real estate price is a standard price for various social welfare such as health insurance premiums as well as holding taxes, including comprehensive real estate taxes. The standard for determining the published price compared to the market price is the market price reflection rate, and the government has decided to freeze this market price reflection rate next year without increasing it. Let's hear directly from Minister of Land, Infrastructure and Transport Park Sang-woo what this means.Welcome.

[Park Sangwoo]
Hello.

[Anchor]
To talk about the market price reflection rate, we need to know the current real estate disclosure price realization plan first, what is this concept?

[Park Sangwoo]
The realization plan was made in 2020 during the previous administration. As I said earlier, the official price reflects about 70% or 69% of the market price on average. There are many discussions about how good it would be. However, the so-called market reflection rate plan is to artificially raise the market price reflection rate from 70% to 90% in order to induce the sale by taxing large property owners.

[Anchor]
A plan to revise the plan came out yesterday. So how will it change from now on?

[Park Sangwoo]
The basic direction of the revision was set at the public welfare debate in March. The specific government policy was set in September, and what came out yesterday was to report it to the State Council because it had to be approved by the State Council. If the market price reflection rate rises, real estate holding taxes such as property tax and comprehensive real estate tax will rise as you said earlier. It can be understood again if house prices and land prices rise, but wouldn't it be unfair for the people who pay taxes by artificially raising the market reflection rate even though land prices have fallen or not risen?

In addition to these real estate taxes, it is used for various purposes such as calculating health insurance premiums, whether they are eligible for basic beneficiaries, and whether they are eligible for national scholarships. The official price is being used for 67 purposes. So, in addition to the purpose of raising it for the purpose of punitive taxation so that many real estate owners can sell real estate, a rise in the official price can cause unintended and unexpected side effects for the low-income class. So this time, we will announce a plan to maintain the current rate without raising the artificial reflection rate and actually work on it.

[Anchor]
Then, what effect can be expected if the market price reflection rate is frozen like that?

[Park Sangwoo]
First of all, the people are predictable. Last year, I paid a lot of property taxes or comprehensive real estate taxes, so this year will be at that level. Also, last year, I maintained my health insurance dependency status, so it will be maintained this year. Also, those who received scholarships or those who benefit from basic recipients. These people have the advantage of being able to make predictions fairly stably. And above all, isn't it said that if you artificially raise the reflection rate to increase taxes or reduce welfare benefits to the people, various people's livelihood economies are difficult now? In this situation, the government should help, but rather, it has the negative effect of collecting more taxes or depriving social security benefits that it was giving, so I think the plan will work in that respect.

[Anchor]
Then, according to the amendment, next year's official price will be multiplied by the market price at the end of this year and the market price reflection rate for next year. Then, what reflects the market price reflection rate will be the official price for next year, so what will be the effect that the people will feel?

[Park Sangwoo]
For those who think that their house prices or land prices have risen, the official price will rise within that range. For those who do not, the price of their real estate will be reflected in accordance with the facts, so what the people feel is that the official price will be set as we feel, and taxes and other benefits will be maintained as expected.

[Anchor]
In terms of housing prices in Seoul, there are areas where housing prices have risen a lot and there are places where housing prices have fallen. Then, would there be some differences depending on each region?

[Park Sangwoo]
That's right. The official price does not increase that much just because there is a maximum price that has risen one price, but the direction may be correct when calculating the official price, considering the traded price plus and surrounding market prices, but individual figures are expected to fluctuate slightly lower than what was reported in the media. So, there are areas where prices have risen now in Seoul, or areas that remain flat, and there are more places that have fallen if you go to the metropolitan area or provinces. In those areas, you can think that there will be as many changes as the people understand the real estate market price.

[Anchor]
The purpose of realizing the declared value of this real estate was to set the house price by putting the burden of holding tax. But if this is revised in the future, how should we set the house price?

[Park Sangwoo]
Aren't real estate just like ordinary things? The price of goods is determined by supply and demand, as is the case with all goods. So, rather than the policy of artificially imposing a lot of holding taxes on a specific class so that they give up their homes, it is the right way to supply a lot of good houses so that the supply and demand balance can be achieved naturally. Also, don't buy a house by putting a lot of pressure on the people, rather than doing this, I think it is the right direction to supply a lot of good options so that sufficient choices can be made in the market. Therefore, we are proceeding with the best housing supply plan such as the 8.8 measures announced last summer without a hitch.

[Anchor]
The direction you said would be the right direction, but some people are worried that this will encourage housing prices if we don't raise the official price, what do you think about this?

[Park Sangwoo]
As I said earlier, house prices are determined by supply and demand. Therefore, the downtown area of Seoul is revitalizing reconstruction and redevelopment to supply a lot of supplies, and for the younger generation, we are choosing to supply housing by developing restricted development zones or available housing sites. As you said earlier, speculative forces will stick to the announcement price because it does not go up. As I said earlier, supply and demand take precedence, so if the supply and demand situation improves, it is expected that it will be difficult for speculative forces to stick to it. And malicious market manipulation and such things are planned to be taken through a separate crackdown in order to strengthen market transparency.

[Anchor]
This time, you decided to freeze it as an administrative plan, not a revision of the law, right?

[Park Sangwoo] It's
.

[Anchor]
Then, in the future, we should move on to the revision of the law, but in fact, it doesn't seem easy to revise the law, what plan do you have?

[Park Sang-woo] The amendment to the
Act has already been submitted to the National Assembly. It will probably be discussed at the National Assembly's Land, Infrastructure and Transport Committee, but I don't know. The ruling party is in favor of it, and the opposition party has yet to officially confirm its position, but I don't think it will be easy to accept it because it is one of the key real estate policies put forward by the previous government. However, in the last presidential election process, I remember that the opposition party's presidential election pledge during the last presidential election had such a pledge to lower the holding tax burden. So, given that there is a pledge not to raise the declared value sharply, if we understand that a rise in the declared value will increase the burden on the people, wouldn't it be difficult for all political parties to continue to insist on increasing the burden on the people? In that regard, I think there is a possibility of an agreement that can seek mutual understanding, and I will make efforts to persuade and discuss hard.

[Anchor]
According to the amendment, there may be some concerns for residents in areas where housing prices have risen a lot this year because it reflects changes in housing prices next year. In the case of the 3 Gangnam districts, it is predicted that they will pay 20-30% of the holding tax now, so how will the people accept this?

[Park Sangwoo]
The figure is about the formation of the highest price. Now, the areas where housing prices have risen in Seoul this year are estimated to have risen by 7-8%, and the average price in Seoul has risen by 5-8%, so it depends on the region. It's different, but those are actually based on certain transactions, the highest price transactions, and I don't think they're going to go up that much in a hurry because they take into account a lot more different factors than that.

[Anchor]
I see. Let's stop here. So far, I have been with Minister of Land, Infrastructure and Transport Park Sang-woo. Thank you.