The Year the House Was Torn Down, the Land Was Worth 44% More

It is easy to assume that knocking a house down makes a property worth less.

But one plot in Seoul's Itaewon district was assessed 44% higher than three years earlier in the very year its building disappeared. The site belongs to actor Song Joong-ki, who bought the house standing there in November 2016 for 10 billion won. The old house came down in February 2020, and that year the land was assessed at 6.76 billion won.

None of this is strange in Korea. Value here is recorded against the land rather than the structure — and that is not a matter of buyer preference. It is written into the law.

At a glance

The stretch where the number climbed fastest does not overlap with the stretch where the building was intact. Between 2017 and 2020 the house on this land aged and then vanished entirely, and over the same period the assessed value rose by 2.065bn won.

So this is not a house price. It is a number that kept being assigned while there was no house.

What appreciated was not the house but the lot number

The site measures 602㎡ — 182 pyeong in Korean units. Divide the assessment by the area and you get roughly 7.8m won per ㎡ in 2017 and about 12.04m won per ㎡ in 2021. Same width, same address, and the unit price moved that far in four years.

What happened above ground ran the other way. The building permit was issued in November 2018, the old house was demolished in February 2020, and completion — originally targeted for June 2021 — slipped eight months to 8 February 2022. For most of that stretch there was no finished building on the plot at all.

The banks saw it the same way. The property carried roughly 8bn won in mortgage liens at purchase, refinanced from 2020 into the 3.9bn won range. What secured those loans was not the building that came and went. It was the numbered parcel of land.

This is why buyers of older Korean houses so often purchase with demolition already assumed. The structure adds nothing, and if clearing it costs money, it is priced as a negative.

Digging three floors down on this site follows the same arithmetic. When land is expensive and narrow, you buy floor area downward because you cannot buy it upward.

Tax law states that a building is used up in 40 years

Up to here it sounds like market habit. But it is a documented standard before it is a habit.

Schedule 5 of the Enforcement Rules of Korea's Corporate Tax Act sets standard useful lives for buildings. Steel-frame reinforced concrete, reinforced concrete and stone buildings are assigned 40 years, with an accepted range of 30 to 50. Tax law, then, treats a concrete building as an object whose book value has run out after roughly four decades.

And under the same rules, land is not a depreciable asset at all. It is not considered to wear out, so nothing is written off each year.

One side shrinks annually and the other does not. Repeat that for forty years and only one outcome is available.

The table reads like accounting, but it is used directly across the negotiating table, because both sides price a building by the years it has left.

But the land values quoted so far are not market prices

There is a trap buried here. The 4.7bn, 6.8bn and 7.3bn figures in this article are officially assessed land values, calculated by the government to levy tax — not prices anything traded at.

That is why a property bought for 10bn won was assessed at 4.696bn the following year. The realisation ratio the government has targeted runs somewhere around 70% of market value, and for 2026 the standard land assessments rose 3.35% nationally and 4.89% in Seoul.

Every plot effectively carries two ledgers. Transaction prices and assessed values measure the same ground for different purposes, so the numbers differ. This is where readers of Korean property coverage go wrong most often — miss which ledger a figure came from and your picture is off by nearly a factor of two.

It is also why this article leads with assessments rather than the 20bn won market estimate that circulated. That estimate is a valuation quoted by media, not a confirmed transaction, whereas the assessed value is recomputed the same way every year and therefore can be compared across years.

In apartments the same logic surfaces as the number 30

This is not confined to detached houses. Korean apartment complexes start talking about reconstruction around the 30-year mark, and that 30 is also a figure lifted from regulation rather than instinct.

The Enforcement Decree of the Act on the Improvement of Urban Areas and Residential Environments lets each city or province set the threshold for an aged or defective building anywhere from 20 to 30 years after completion, and Seoul uses 30. A 2025 revision renamed the old "reconstruction safety diagnosis" to "reconstruction assessment", and complexes past the 30-year line may now begin the project on condition that the assessment is completed later.

Buildings are not being cleared because they have physically failed. They are cleared because taller and denser is profitable on the same ground, and that clock is set to 30 years.

One thing does diverge in apartments. The owner of a detached house decides alone what happens to the whole parcel, whereas an apartment owner holds a share of the complex's land. So however firmly the value sits on the ground, no single owner can act on it, and the key passes from ownership to a vote among hundreds of households.

What this means where you are

If value sits on land, the next question is short: who is allowed to own that land?

The table makes Korea's position clear. It is a country where value concentrates in land, and where that land is open to foreign buyers too. Across Southeast Asia, foreigners start with condominiums not out of preference but because land was never on the menu.

Japan arrives at the same conclusion by a different road. Japanese tax law assigns wooden houses a statutory useful life of 22 years, and second-hand houses past that line are traded as though the structure were worth nothing. Buildings are erased faster there than in Korea, and what remains is the land.

For anyone planning to live in Korea, the practical residue is small. Check the lot number and the site area before the condition of the building, work out whether a figure in an article is a transaction price or an assessed value, and if it is an apartment, count from the completion year to see how many years remain before 30.

The question that stays open

The house in this article was completed in 2022. Follow the tax schedule and its book value reaches zero in 2062.

What will still hold value on that plot is already settled. Which leaves a harder question about every new building now going up across Korean cities — are they being built to live in, or to hold the ground until the value underneath is cashed out?

Read next

• A former gang boss runs for apartment council chair — when land is split into shares, the key moves from ownership to an election
• My ex-husband borrowed 13.2 billion won in my name — what a single name field does on a deed and a bank account
• 2,130 pop-up stores opened in six months — where the same land values show up as rent

Sources

• KPI News — Song Joong-ki's Itaewon land alone gained 2.1bn won in three years
• Bizhankook — Song Joong-ki's Itaewon house, once called the newlywed home, quietly completed
• Korean Law Information Center — Corporate Tax Act Enforcement Rules, Schedule 5: standard useful lives for buildings
• Korean Law Information Center — Act on the Improvement of Urban Areas and Residential Environments
• KOTRA — Thailand opens residential land ownership to foreigners