An Analysis of Tax Equity in the Assessed Value of Officetels in Seoul

This study empirically analyzes tax equity issues in Seoul's officetel tax system using 7,060 sales transactions from 2023 and the 2024 assessed value (AV) data. We conducted descriptive statistics and analyzed various regression models (Cheng, Kochin-Parks, Bell, Clapp) to assess the tax equity based on key indicators. We found the AV fails to reflect market values, exhibiting a regressive structure. The average tax valuation rate is 60%, but for the top 10% of officetels, it drops to 46.02%. This indicates high-priced properties are significantly undervalued, reducing their tax burden. Both horizontal and vertical equity are severely compromised. The Coefficient of Dispersion (COD) is 42.45, far exceeding international standards and showing significant valuation imbalance. The Price-Related Differential (PRD) is 1.138, confirming the regressive nature where high-priced officetels are relatively undervalued. The root cause is the ‘Separate Land and Building Valuation’ method, which artificially divides assets traded as a single unit. We propose two policy recommendations. First, a fundamental solution is a ‘unified valuation method’ to fully reflect market value. Second, as a short-term measure, strengthen linkage with sales price data and introduce AI-based Automated Valuation Models (AVMs) to improve precision. Technical adjustments, such as applying specific value correction coefficients for high-priced officetels and adjusting usage-specific indices, should also be implemented to mitigate the regressive nature and ensure consistency.