55 percent of Seocho apartment transactions in October involved property gifting

It was found that 55 percent of apartment units sold in Seocho-gu, Seoul, last October were gifts, representing 14.4 percent of all apartment transactions in Seoul—the highest proportion in one year and 10 months since December 2022. With housing prices rising at a relatively moderate pace, the market has seen a temporary demand for property gifting as it is anticipated that tax burden will increase following the change made this year to the way gift taxes are calculated for trophy properties.

According to the Korea Real Estate Board’s data issued on Sunday on apartment unit transactions by cause, 1,000 (14.4 percent) out of the 6,926 units sold in Seoul last October were gifted. The share of this cause rose 1.8 times compared to October 2023 (7.9 percent), marking it at its highest level since December 2022 (29.9 percent).

Seocho-gu had the highest share of property gifting (55 percent) in the Seoul area, followed by Gwangjin-gu (26.7 percent), Gangdong-gu (21.2 percent), Gangnam-gu (20 percent), and Songpa-gu (17 percent).

This trend continued through November, with property gifts accounting for 13.6 percent of apartment unit transactions in Seoul, not so much different from the share recorded in the month earlier. Neighborhoods along the Han River, known to have super expensive apartment buildings, showed particularly high rates of property gifting, with Seocho-gu recording 40 percent, Songpa-gu 36 percent, Gangdong-gu 24 percent, and Gangnam-gu 14.5 percent.

The uptick in the share of gift transactions is mainly due to the stricter method of calculating gift taxes. Previously, gift taxes were estimated based on market value. However, official government-assessed values are exceptionally applied to super-high-priced homes, the market value of which is difficult to assess due to the low frequency of transactions.


Ho-Kyeong Kim kimhk@donga.com