Government and Ruling Party Push Follow-up Real Estate Legislation... Opposition Party Proposes Counter Bill

Revised Proposals on Comprehensive Real Estate Tax and Capital Gains Tax to Be Finalized This Week
Targeting Passage in July Special Session
Kim Tae-nyeon: "Comprehensive Measures to Support Actual Homebuyers Will Be Supplemented"
United Future Party Proposes Bill to Ease Comprehensive Real Estate Tax
Conflict with Ruling Party Over Sale Price Ceiling System Continues

Lee Hae-chan, leader of the Democratic Party of Korea, is attending the Supreme Council meeting held at the National Assembly on the 6th and delivering opening remarks. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Kang Nahum] The government and ruling party are accelerating follow-up legislation for real estate measures, including strengthening the comprehensive real estate tax. They plan to push the bills in the form of 'lawmaker-initiated legislation,' which tends to be processed relatively quickly, aiming to pass them during the July extraordinary session of the National Assembly.

According to the Democratic Party on the 6th, the government and ruling party plan to draft amendments to laws such as the comprehensive real estate tax and capital gains tax and submit them to the National Assembly within this week. A ruling party official said, "It is highly likely that the amendments will be pursued in the form of lawmaker-initiated legislation by the ruling party's secretary of the Planning and Finance Committee." This means they intend to speed up the process through lawmaker proposals rather than government-initiated bills.

In this regard, the ruling party, government, and Blue House held a closed-door meeting last night at the Prime Minister's residence in Samcheong-dong, Jongno-gu, Seoul, to discuss additional measures. The meeting reportedly included Lee Hae-chan, leader of the Democratic Party, Kim Tae-nyeon, floor leader, Cho Jeong-sik, chairman of the Policy Committee, and Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance.

Floor leader Kim said at the Supreme Council meeting held at the National Assembly that day, "We will swiftly proceed with follow-up legislation after June 17," adding, "We will thoroughly review the process to enhance the effectiveness of the comprehensive real estate tax rate, including strengthening the tax on multi-homeowners and reducing various deductions." He also emphasized, "We will supplement supply measures to help genuine buyers purchase homes."

However, since the opposition parties are preparing counter-bills, a fierce clash is inevitable. Intense 'legislative battles' between the ruling and opposition parties are expected in each standing committee of the National Assembly over various real estate measures such as raising the comprehensive real estate tax, the three lease laws, and the price ceiling system for pre-sale apartments.

A real estate agency office in Seoul on the 6th / Photo by Hyunmin Kim kimhyun81@

Currently, the government and ruling party are discussing ways to increase the comprehensive real estate tax burden on speculative homeowners, including multi-homeowners. They plan to raise the top tax rate to 4.0% and lower the taxable value brackets. They are also considering expanding the number of people subject to the higher tax rate. Although no amendment to the comprehensive real estate tax law has yet been proposed by ruling party lawmakers in the Planning and Finance Committee, it is highly likely that a bill will be introduced this week following President Moon Jae-in's directive to prioritize the comprehensive real estate tax law.

However, the United Future Party has recently introduced several bills to ease the comprehensive real estate tax, making passage through the National Assembly difficult. In fact, the United Future Party introduced five bills at the start of the 21st National Assembly to expand exemptions and relax standards related to the comprehensive real estate tax.

United Future Party lawmaker Tae Young-ho has taken the lead in proposing an amendment to exclude one house owned by one household from the comprehensive real estate tax and to deduct the official assessed price of the house actually occupied from the taxable base. Lawmaker Bae Hyun-jin also proposed an amendment to increase the deduction amount for the taxable base from the current 600 million KRW to 900 million KRW (1.2 billion KRW for one household with one house) and to raise the deduction rates for long-term holders and seniors aged 60 or older.

[Image source=Yonhap News]

In the Land, Infrastructure and Transport Committee, the ruling and opposition parties are at odds over the 'price ceiling system for pre-sale apartments.' The conservative opposition, including the United Future Party, is pushing for the abolition of the price ceiling system. United Future Party lawmaker Lee Heon-seung has taken the lead in proposing an amendment to the Housing Act to exclude private land from the price ceiling system. The intention is to block the application of the private land price ceiling system to complexes applying for resident recruitment announcements in speculative overheated districts such as Seoul and Gyeonggi Province starting from the 29th.

Independent lawmaker Hong Joon-pyo also proposed an amendment to abolish the price ceiling system for pre-sale apartments. This is his first bill. The amendment includes reducing the designation units of speculative overheated districts from cities, counties, and districts to towns, townships, and neighborhoods, and stipulating the criteria for designation of speculative overheated districts by law rather than enforcement rules.

On the other hand, Democratic Party lawmaker Lee Won-wook proposed an amendment to the Housing Act based on the price ceiling system for pre-sale apartments. It imposes a mandatory residence period for residents of apartments subject to the price ceiling system in the metropolitan area. This aims to block speculative demand for homes supplied at prices lower than surrounding market prices in the metropolitan area.

In the Legislation and Judiciary Committee, a legislative rush by the ruling coalition has begun to amend the Housing Lease Protection Act, which is a key part of the 'three lease laws' (right to request contract renewal, rent ceiling system, and rent reporting system). As of the 5th, a total of nine amendments to the Housing Lease Protection Act have been submitted to the committee, all proposed by ruling coalition parties including the Democratic Party, Justice Party, and Open Democratic Party.

This content was produced with the assistance of AI translation services.