The government decided to keep next year's official appraisal price realization rate (market reflection rate) at 69% for the fourth straight year. However, holding taxes on apartments in key areas such as Seoul's "Han River belt" and Gangnam are expected to rise by up to 45% from this year. As recent price gains at major dwelling complexes along the Han River belt are reflected in the official appraisal prices, the tax burden is expected to grow.
The Ministry of Land, Infrastructure and Transport (MOLIT) said on the 13th that it reviewed and approved a plan titled "Plan to promote real estate price disclosure in 2026 (the plan)" at the Korea Real Estate Board (KREB) Seoul Gangnam Branch in Seocho-gu, Seoul. After holding a "public hearing to improve real estate price disclosure policy" in the morning, the ministry prepared the plan following deliberation by the Central Real Estate Price Disclosure Committee.
Considering the tax burden, the government decided to keep next year's real estate official appraisal price realization rate at the current level for one year. The realization rate for official appraisal prices of multifamily dwellings next year will be applied at 69% for the fourth straight year. land and single-family dwellings will also be frozen for the fourth year at 65.5% and 53.6%, respectively. Only this year's market price changes will be reflected in next year's official appraisal prices.
The government had planned to raise the realization rate of official appraisal prices for multifamily dwellings, single-family dwellings, and land to as high as 80.9% next year. Real estate official appraisal price realization was pursued starting in 2020 under the Moon Jae-in administration. At that time, the plan was to gradually raise the realization rate of apartment official appraisal prices from 69% to 90% of market prices by 2030. After the Yoon Suk-yeol administration took office, the realization rate was restored to the 2020 level (69%) starting in 2023. Under the Act on the Public Notice of and Appraisal of Real Estate Values and other laws, the goal of 90% of market prices by 2030 remains in place.
However, even if the realization rate is kept the same as this year, holding taxes on major apartments in Seoul are expected to surge by up to 45% compared with this year. This is because the price surge in key areas such as the Han River belt and Gangnam will be reflected in the official appraisal prices. The holding tax structure applies a progressive tax rate to the tax base, which is calculated by multiplying the official appraisal price by the fair market value ratio. In general, the official appraisal price is calculated and released based on the actual transaction price of the previous year.
According to the Korea Real Estate Board (KREB), Seoul apartment sale prices rose 5.53% through the second week of November this year. That is 1.84 percentage points higher than the full-year increase of the previous year (3.69%).
According to a simulation by Woo Byung-tak, Head of Team in the WM Business Division at Shinhan Bank, next year's holding tax for an exclusive 84 square meters at Banpo Xi in Seocho-gu, Seoul, is 17.9 million won for a one-household, one-dwelling standard. That is more than 40% higher than this year's holding tax (12.74 million won. The holding tax for an exclusive 84 square meters at Mapo Xi in Mapo-gu, Seoul, is expected to increase by about 40%, from 2.56 million won this year to 3.53 million won next year. For an exclusive 82.6 square meters at Jamsil Jugong Complex 5 in Songpa-gu, Seoul, next year's holding tax is expected to be 12.58 million won, more than 45% higher than this year.
Next year's official appraisal prices are scheduled to be released in early March, based on Jan. 1. After gathering opinions and deliberation, they are expected to be finalized in April next year.