President Lee Jae-myung has raised the possibility of strengthening property taxes on luxury homes, making the definition of 'luxury housing' a key issue in the ongoing tax reform discussions. In Seoul, it has been reported that more than one in ten apartments are already valued over 3 billion won ($2.3 million), suggesting that the tax base could expand significantly depending on how the threshold is set.
According to data obtained by Aju Economy from real estate firm R114, as of June 12, out of a total of 1,468,824 apartments in Seoul, 166,554 units, or 11.3%, are valued at over 3 billion won. This means that more than one in ten apartments in the city already exceeds this price point.
In terms of price distribution, the largest segment is apartments priced below 1 billion won, totaling 565,291 units (38.5%). This is followed by 320,440 units (21.8%) priced between 1 billion and 1.5 billion won, and 223,354 units (15.2%) priced between 1.5 billion and 2 billion won. Additionally, there are 113,854 units (7.8%) priced between 2 billion and 2.5 billion won, 79,331 units (5.4%) between 2.5 billion and 3 billion won, and 166,554 units (11.3%) exceeding 3 billion won.
In total, there are 359,739 apartments priced over 2 billion won, which accounts for 24.5% of the total. This indicates that one in four apartments in Seoul is already valued above this threshold.
The average sale prices by price range are as follows: below 1 billion won is 661 million won, between 1 billion and 1.5 billion won is 1.2347 billion won, and between 1.5 billion and 2 billion won is 1.728 billion won. For apartments priced between 2 billion and 2.5 billion won, the average is 2.2197 billion won, between 2.5 billion and 3 billion won is 2.7378 billion won, and those exceeding 3 billion won average 4.5589 billion won.
Earlier, during a Cabinet meeting on July 14, President Lee sought public input on the threshold for luxury housing, noting that '30 billion won' was the most frequently selected option. He remarked, 'Isn't that too harsh?' and added, 'If a house is valued at 3 billion won, its official price is only in the low tens of millions.' He further expressed surprise, stating, 'I thought it would be around 5 billion won.'
Lee's comments suggest that if homes valued at 3 billion won are uniformly classified as luxury housing, the number of properties subject to taxation could increase significantly.
Market analysts believe the government may set the luxury housing threshold between 4 billion and 5 billion won, although no specific criteria have been finalized yet. If established at this level, major new developments in Gangnam and high-end apartments along the Han River are expected to be prioritized for taxation.
The government plans to begin a public discussion on tax reform today, followed by a national forum on July 23, with proposals for changes to luxury housing taxes expected to be included in a tax reform bill to be announced by the end of the month.
Currently, the comprehensive real estate tax applies basic deductions and tax credits for seniors and long-term homeowners, but there have been ongoing concerns that lower-value multi-homeowners may bear a heavier tax burden. As a result, discussions are underway to manage luxury single-home properties under a separate tax bracket, but the scope of taxable properties will vary significantly depending on the threshold set.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.