Proposed 1.4 Billion Profit from Investing in Gangdong-gu Redevelopment Villas Instead of Double Compensation for Dasan Yusung Central Apartments

A viewer stated that they own two apartments in Dasan, one for residential use and one rented out, and had received a deposit for selling the rented apartment due to the burden of owning two homes. However, after the contract, the area was designated as a regulated zone, and apartment prices rose. The viewer inquired whether it would be more profitable to keep the apartment, even if it meant paying double the deposit as compensation.

The expert recommended realizing profits by selling at the current time, leveraging the advantage that the Dasan area is a non-regulated zone, thus exempt from heavy capital gains taxes. They pointed out that while non-regulated zones have good investment accessibility and potential for price increases, if prices rise, they could again be designated as regulated zones, making sales difficult. The viewer, as a rental business owner, mentioned that this was their last chance to receive benefits for up to 8 years and regretted selling quickly.

They emphasized that aiming for additional capital gains through double compensation would not yield significant real benefits. This is because if apartment prices rise further, there's a possibility of the area being re-designated as a regulated zone by the end of the year or next year. The expert advised that proceeding with the sale under the current contract would be a rational way to realize profits.

It was noted that it is important to secure the maximum capital gains by fully utilizing the long-term special deduction benefits as a rental business owner. If the area were to become a regulated zone again in its current state, it could become complicated with heavy capital gains taxes, so maintaining the current sales contract is advantageous.

The viewer explained that they originally planned to sell their two Dasan apartments and move to Seoul, but their plans were disrupted by their child's school transfer, and they were looking at areas in Myeongil-dong and Sangil-dong in Gangdong-gu. The expert suggested using the proceeds from the Dasan apartment sale to invest in redevelopment areas in Myeongil-dong or Godeok-dong in Gangdong-gu. They added that there is also an option to live in Gangdong-gu by renting (jeonse or monthly rent) while keeping the current residential apartment and investing in redevelopment.

Two methods for investing in Seoul were explained. The first is to upgrade to an apartment, and the second is to invest in a villa that will become an apartment in the future. In this case, it was explained as a concept of maintaining the currently owned home while making an additional investment.

It was pointed out that current apartment prices in Myeongil-dong and Godeok-dong are too high to enter. Even after selling two Dasan apartments, purchasing an apartment in these areas would be difficult. Instead, investment in redevelopment-planned single-family home plots in Myeongil-dong or Godeok-dong was proposed. These areas were emphasized as having a high likelihood of redevelopment.

In Myeongil-dong, consent forms for redevelopment are currently being collected, and Godeok 2-2 District is also expected to start collecting consent forms soon. The estimated investment for redevelopment villas in this area is around 300 to 400 million KRW. The expert expressed confidence in the redevelopment potential of these areas, emphasizing that they would not recommend investment if redevelopment were not likely to proceed.

It was explained that new villas under 600 million KRW are exempt from heavy acquisition taxes and are excluded from the calculation of the number of homes owned. Additionally, even if acquired in a designated adjustment area, they are exempt from heavy capital gains taxes. This is a government-created system that significantly reduces the tax burden for new villa investments.

It was re-emphasized that new villas priced at 600 million KRW also receive the benefit of being exempt from heavy capital gains taxes according to government policy. Such villas can avoid heavy taxation on both acquisition and capital gains, making them highly attractive investments.

An example was given of purchasing a new 600 million KRW villa with a 200 million KRW jeonse (lump-sum deposit) loan, requiring a 400 million KRW investment. It was suggested that a burden charge would arise during future redevelopment, and at that time, selling the current home to pay the burden charge could be considered. It was explained that the villa would be acquired with the plan to live in Myeongil-dong or Godeok-dong, where redevelopment has been confirmed.

It was predicted that the burden charge for this area would not be as high as expected due to excellent business viability. In particular, the subway line 9 extension is scheduled to open in just two years and is currently under construction. Such areas can receive double the floor area ratio compared to other regions, indicating very good business viability. This, in turn, leads to a burden charge that is half of what it would be in other areas, they added.

Assuming a burden charge of around 1 billion KRW during redevelopment, it was illustrated that a total investment of 1.6 billion KRW (600 million KRW for the villa + 1 billion KRW burden charge) could result in an apartment like Godeok Graçium. Although Godeok Graçium currently trades at 2.6-2.7 billion KRW, a new apartment could reach 3 billion KRW, thus expecting a capital gain of 1.4 billion KRW from a 1.6 billion KRW investment to receive a 3 billion KRW apartment.

It was explained that achieving a 1.4 billion KRW profit by holding an apartment would take a much longer time, and if the area becomes a land transaction permit zone or a regulated zone in between, it could take even longer. In contrast, new villa redevelopment investment was emphasized as a good opportunity to realize a 1.4 billion KRW capital gain in a short period due to the current lack of regulations, stating that this is why it is strongly recommended.

It was explained that the price of redevelopment villas gradually increases over time, with a 600 million KRW villa rising to 1 billion, 1.5 billion, 1.8 billion, 2 billion, and finally up to 3 billion KRW. It was emphasized that investing in redevelopment villas would bring more profit than acquiring and holding an apartment. It was added that premiums continue to be added as the project progresses.

It was explained that these days, when a redevelopment area is designated as a maintenance zone, a premium of at least 500 to 600 million KRW is immediately added. While it takes considerable time for an apartment to rise by 500 million KRW, premiums for redevelopment areas start accumulating rapidly from the stage of collecting consent forms.

In Myeongil-dong, the current consent rate for the cooperative reached about 70%, and it was explained that once selected as a candidate site by the district office, an additional premium of 200 to 300 million KRW would be added, making investment difficult. Therefore, Godeok 2-2 District, which is currently in the stage where investment funds are between 300 and 400 million KRW, was recommended as an alternative. It was suggested that investing in Godeok 2-2 District should be considered since Myeongil-dong prices have risen further.

It was strongly urged not to cancel the existing apartment sale contract but to utilize those capital gains for investing in redevelopment villas in better areas. It was emphasized that this is a significant opportunity in one's life to greatly increase assets, and that one could become wealthy by succeeding in just a few such investments.

While Banpo area is good, it was dismissed as unsuitable from the perspective of redevelopment villa investment. This is because Banpo villas already exceed 900 million KRW, thus they cannot receive the heavy acquisition tax exemption and heavy capital gains tax exemption benefits given to new villas under 600 million KRW. It was explained that these tax benefits are crucial for investors who already own apartments.

Investment in remodeling complexes was not recommended due to low profitability. While apartment prices in Dasan would continue to rise, redevelopment villa investment was asserted as the answer for achieving much larger capital gains. The expert added that they could speak with certainty because they knew the answer.