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PatrickGHBusan
Joined: 24 Jun 2008
Location: Busan (1997-2008) Canada 2008 -
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 Posted: Sat Aug 24, 2013 5:51 pm Post subject: |
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| edwardcatflap wrote: |
| Yes I meant paying directly from a bank account and not having to arrange a mortgage. Has no one done it here? In the UK you buy a place through a solicitor who checks the paper work, arranges a survey etc...and makes some checks on your personal finances. Was wondering if it worked the same way here. |
We did it with our first and second apts in Busan. The one we own now was not paid for in full (almost).
We used a bank.
I will echo what was said earlier however: keep money aside for the taxes as those can be steep.
Also, apt complexes will charge you a fee even if you have no morgage. this fee is for maintenance of the building and whatever services are offered and can be pretty high in the newer apt towers.
Oh and weigookin74 you do realize that when you buy a house in or condo in Canada you have to pay property taxes even if you buy it outright and that most cities will also charge you a land tax (one time payment) based on the value of your property right?
You can also add school taxes to your housing purchase and living costs.
Finally, when you buy a new property (as in newly built) you have to pay sales taxes on it (this varies from province to province). |
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giraffe
Joined: 07 Apr 2009
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| Posted: Sat Aug 24, 2013 5:52 pm Post subject: |
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| Weigookin74 wrote: |
Wow! What a dumb a$$ stupid logical system. In Canada, if you got the cash (and few do), you can buy whatever place you want. Real estate agents will be tripping over you and kissing your ^*(). Pretty straightforward. There's common sense and then there's the Korean way of doing things. As for Condo buildings, higher floors with a view will cost more. Pay more and get more. None of this bullcrap of having an account at your bank for 2 years and hoping to get a higher floor through a lottery system. Remind me to never marry and settle here. Sweet ^&#(()@. Now, I've heard everything. Geeze.
BTW: Not dumping on you personally. Congrats on your new apart. |
Well this is Just for 분양.... There are alot of other options to buy an apt. You can buy an old apt with 매매 and not have to deal with the bank accounts. OR you can wait until the 분양 is all sold and buy the property from them However doing this you have to wait a year. The thing thats good about 분양 is that if you're smart / careful with where you buy ie: really really good location You can then turn around and make a really good profit because 분양 apts sell for cheap. Its basically investing. Not all 분양 are good investments though... If the APT being built is in a good location what people do is they apply for the 분양 and they hope they "win" one of the apts. ALot of people actually dont have the money for these apts but will wait a year and then Sell it!
There are positives and negatives about this system. the positive thing is that this prevents rich people from snapping up the best apts and selling them for profit... Theres a limit to how many 분양 you can sign up for even if you have the right accounts. BUT there are ways around this. Richer people will put accounts in their sons/daughters name ( even if they are just 18 years old) and try to invest that way. Overall It gives a "fair" chance for anyone to get a new apt at 분양 cost. IN a way its how the Gov can control the system... The down side is that You dont have the choice of which apt floor/ building you're in HOWEVER there are a few choices for example when you do 분양 the first 5 floors are cheaper and then floors 5+ are more expensive. So you can pick to live on lower floors or higher than 5th floor. If you pick lower floors youre in a lottery for lower floors only for which ever layout you picked..
There are usually several apt layouts to chose from. You can see the model houses first. When you 분양 you need to pick ONE layout and thats the "lottery" you get put into for that layout. You only get one chance. UNLESS the apts dont sell. In the circumstance anyone could get one without a housing account and pick the one they want... But if the apts dont sell You probably dont want to live there... Its possible for your apt price to sell for less than the 분양 price later on..
You dont have to like this system. It makes sense in a korean way to do things like this. IF you want something specific, Wait till someone sells their 분양 contract (if its a popular apt it could sell for up to 50 million won more than the base price) OR wait till the apt builds in 2 yeards and wait for the apt that appeals to you... We did it through 분양 because the location was Great! Everyone wanted to invest there so we jumped at it and we we lucky to get one out of the thousands who applied. Because we did our apts are already selling for 30 million won more and will only get higher when the building is built.... Its worth it if you buy the right one...
Yes you have to pay a large tax sum the first year BUt subsequent years its almost nothing.... 10 million in tax is Nothing compared to a 350 million house price.. My parents in canada pay 5000$ in tax a Year.. Its much cheaper here in Korea and works out to be better...
Last edited by giraffe on Sat Aug 24, 2013 6:12 pm; edited 1 time in total |
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giraffe
Joined: 07 Apr 2009
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| Posted: Sat Aug 24, 2013 6:00 pm Post subject: |
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| edwardcatflap wrote: |
| Yes I meant paying directly from a bank account and not having to arrange a mortgage. Has no one done it here? In the UK you buy a place through a solicitor who checks the paper work, arranges a survey etc...and makes some checks on your personal finances. Was wondering if it worked the same way here. |
were paying our apt "cash". No mortgage. WE have to send construction company 30million every 3-4 months for 2 years and then one large 30% payment before moving in + a small sum of around 10 million for taxes and what not. Theres no inbetween solicitors/ people. ITs all direct.
If you buy an older apt or an apt already built through 매매. The budongsan would essentially be your solicitor/ inbetween person. Youd have to pay them a fee and then pay for the apt either through a bank loan or with your own cash... If you loan from the bank the bank will go check out your property. If you dont you just pay for it with a bank transfer directly to the owner. I'm sure there are specific procedures but it should be straight forward if you have all the money.
Last edited by giraffe on Sat Aug 24, 2013 6:23 pm; edited 1 time in total |
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giraffe
Joined: 07 Apr 2009
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| Posted: Sat Aug 24, 2013 6:11 pm Post subject: |
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| 12ax7 wrote: |
| Actually, I've bought a large apartment that wasn't built yet (I've since sold it) and I didn't have to do the whole 분양 thing. Maybe the 분양 system is only how things are done in the larger metropolitan areas, namely Seoul. I know it exists there to real estate speculation, but it only feeds the frenzy in my opinion, playing on Koreans' competitive nature. I don't know if it applies to apartments, too, but there's also a law which stipulates that you must pay a 20% tax on whatever profits you make from selling a building if it is sold within the first 2 years of its purchase. |
분양 is usually only done with the bigger construction companies that cause huge demand / competition. There are ALOT of newly built apts that dont do 분양 in big cities. but yeah its probably mostly done in bigger cities... I'm in Daejeon...
With 분양 the law is that you cant legally transfer the apt to someone elses name for 1 year after buying it. If you sell it you have to pay a tax on the profit.. Not sure how much. Any profit you make has to be reported on your taxes... |
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edwardcatflap
Joined: 22 Mar 2009
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| Posted: Sat Aug 24, 2013 6:17 pm Post subject: |
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| Interesting hearing about all these taxes. In the UK you don't pay anything extra at all until you start living in the place. Then you pay council tax of about 2 million a year. |
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12ax7
Joined: 07 Nov 2009
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| Posted: Sat Aug 24, 2013 6:32 pm Post subject: |
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| giraffe wrote: |
| 12ax7 wrote: |
| Actually, I've bought a large apartment that wasn't built yet (I've since sold it) and I didn't have to do the whole 분양 thing. Maybe the 분양 system is only how things are done in the larger metropolitan areas, namely Seoul. I know it exists there to real estate speculation, but it only feeds the frenzy in my opinion, playing on Koreans' competitive nature. I don't know if it applies to apartments, too, but there's also a law which stipulates that you must pay a 20% tax on whatever profits you make from selling a building if it is sold within the first 2 years of its purchase. |
분양 is usually only done with the bigger construction companies that cause huge demand / competition. There are ALOT of newly built apts that dont do 분양 in big cities. but yeah its probably mostly done in bigger cities... I'm in Daejeon...
With 분양 the law is that you cant legally transfer the apt to someone elses name for 1 year after buying it. If you sell it you have to pay a tax on the profit.. Not sure how much. Any profit you make has to be reported on your taxes... |
My former apartment was built by a larger company, but I guess there just isn't that much competition for apartments in smaller towns (not that you can't make a good return on your investment (we have)). As for the buildings, I know for a fact that you have to sit on one for 2 years before transferring it to someone else's name, otherwise you pay a 20% fine. |
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12ax7
Joined: 07 Nov 2009
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| Posted: Sat Aug 24, 2013 6:32 pm Post subject: |
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Sorry. Double post. For some reason, that's been happening all morning.
Last edited by 12ax7 on Sat Aug 24, 2013 7:27 pm; edited 3 times in total |
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giraffe
Joined: 07 Apr 2009
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| Posted: Sat Aug 24, 2013 6:35 pm Post subject: |
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| edwardcatflap wrote: |
| Interesting hearing about all these taxes. In the UK you don't pay anything extra at all until you start living in the place. Then you pay council tax of about 2 million a year. |
You dont pay anything extra until you live in your apt here in korea.. After the first year of owning youll get a nice property tax bill from the gov... You also have to pay separate apt fees monthly... |
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radcon
Joined: 23 May 2011
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| Posted: Sat Aug 24, 2013 6:35 pm Post subject: |
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| From what I hear, it's a very bad idea to be sending money to a construction company as prepayments for an unbuilt apartment these days. These companies are in a world of hurt. |
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giraffe
Joined: 07 Apr 2009
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| Posted: Sat Aug 24, 2013 6:40 pm Post subject: |
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| 12ax7 wrote: |
| I know for a fact that you have to sit on one for 2 years before transferring it to someone else's name, otherwise you pay a 20% fine. |
All I can say is that our 분양 apt is in my Father in laws name because we didnt have a housing account so we did it through him. NExt June We're transfering the apt to my name. We wont have to pay the 20% fine because we applied for something with the GOV ( forgot the specifics) that exempts us from paying transfer fees. Also might have to do with the apt just changing names.. No profit is being made by anyone. I'm paying for the apt 100% its just in my father in laws name.. ... HOWEVER we'll be paying roughly 10 million in property taxe for the first year... |
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giraffe
Joined: 07 Apr 2009
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| Posted: Sat Aug 24, 2013 6:45 pm Post subject: |
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| radcon wrote: |
| From what I hear, it's a very bad idea to be sending money to a construction company as prepayments for an unbuilt apartment these days. These companies are in a world of hurt. |
depends..... But its important you do your research on everything before you do 분양.... like any investments Its not without its risks... I'm not worried though. our construction company is in the top 3 construction companies... and right now theres a boom in Daejeon and they are doing quite well... I definitely wouldnt buy from a smaller construction company... |
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12ax7
Joined: 07 Nov 2009
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| Posted: Sat Aug 24, 2013 6:54 pm Post subject: |
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| giraffe wrote: |
| 12ax7 wrote: |
| I know for a fact that you have to sit on one for 2 years before transferring it to someone else's name, otherwise you pay a 20% fine. |
All I can say is that our 분양 apt is in my Father in laws name because we didnt have a housing account so we did it through him. NExt June We're transfering the apt to my name. We wont have to pay the 20% fine because we applied for something with the GOV ( forgot the specifics) that exempts us from paying transfer fees. Also might have to do with the apt just changing names.. No profit is being made by anyone. I'm paying for the apt 100% its just in my father in laws name.. ... HOWEVER we'll be paying roughly 10 million in property taxe for the first year... |
Maybe, but I was referring to a building when talking about that fine, not an apartment. We sold our apartment a couple of years after buying it and the current one we live in was bought a couple of years after it was built.
Last edited by 12ax7 on Sat Aug 24, 2013 6:56 pm; edited 1 time in total |
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PatrickGHBusan
Joined: 24 Jun 2008
Location: Busan (1997-2008) Canada 2008 -
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| Posted: Sun Aug 25, 2013 3:21 am Post subject: |
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| edwardcatflap wrote: |
| Interesting hearing about all these taxes. In the UK you don't pay anything extra at all until you start living in the place. Then you pay council tax of about 2 million a year. |
I think that what giraffe and others said is that you pay taxes after you buy the place. I know that is how it works in Canada for example. In Korea, we paid taxes after we bought our apts (ie after we took possession). |
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Weigookin74
Joined: 26 Oct 2009
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| Posted: Sun Aug 25, 2013 7:48 am Post subject: |
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| PatrickGHBusan wrote: |
| edwardcatflap wrote: |
| Yes I meant paying directly from a bank account and not having to arrange a mortgage. Has no one done it here? In the UK you buy a place through a solicitor who checks the paper work, arranges a survey etc...and makes some checks on your personal finances. Was wondering if it worked the same way here. |
We did it with our first and second apts in Busan. The one we own now was not paid for in full (almost).
We used a bank.
I will echo what was said earlier however: keep money aside for the taxes as those can be steep.
Also, apt complexes will charge you a fee even if you have no morgage. this fee is for maintenance of the building and whatever services are offered and can be pretty high in the newer apt towers.
Oh and weigookin74 you do realize that when you buy a house in or condo in Canada you have to pay property taxes even if you buy it outright and that most cities will also charge you a land tax (one time payment) based on the value of your property right?
You can also add school taxes to your housing purchase and living costs.
Finally, when you buy a new property (as in newly built) you have to pay sales taxes on it (this varies from province to province). |
I think my sister pays over 3000 a year in property taxes. It's why I found 10 grand kind of steep. But if it's just a one time fee and you pay nothing after that, then I guess I can live with it if I had to. There is a tax on land transfers, but didn't think it was steep. But, thing is out east, if you own a second home as a rental property, property taxes are double. My dad tried to get into rentals, but found the taxes and hassle of renting to be so idiotic, he got out of them. I can only imagine how absurd a place like Vancouver must be with such crazy prices. |
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Weigookin74
Joined: 26 Oct 2009
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| Posted: Sun Aug 25, 2013 7:49 am Post subject: |
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| But it does drive a point that as a teacher here renting a villa, fees and taxes are low. But once you start owning and making more money, the government really gets their claws into you, don't they? |
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