A Comprehensive Real Estate Tax Bill Including Property Tax Is Coming Out

Kim Tae-nyeon, floor leader of the Democratic Party of Korea, is attending the policy coordination meeting held at the National Assembly on the 9th and delivering an opening remark. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporters Park Cheol-eung and Kim Hyun-jung] The Democratic Party of Korea is expected to propose a package bill next week that consolidates strengthened real estate tax laws, including the comprehensive real estate holding tax (종부세, Jongbu-se), capital gains tax, property tax, and acquisition tax, prepared through government consultations. The intention is to target multi-homeowners by increasing tax burdens at every stage?when buying, holding, and selling properties?to curb speculation.

On the 9th, Go Yong-jin, the ruling party whip of the National Assembly’s Planning and Finance Committee, said in a phone interview with Asia Economy, "As the whip of the Planning and Finance Committee, I intend to propose the bill discussed by the party, the Blue House, and the government as a member-initiated bill," adding, "Since this is a comprehensive real estate measure, it must include the comprehensive real estate holding tax, property tax, capital gains tax, acquisition tax, etc. To propose them all at once as a comprehensive set, it will likely be next week."

He continued, "It seems more effective to propose them as a package. However, since physical time is needed to process them in the July extraordinary session, the respective tax law amendments may be proposed sequentially." Within the Democratic Party, individual lawmakers have been proposing various real estate-related bills, but tax-related bills through party-government consultations appear to be unified through the Planning and Finance Committee whip.

The party and government are expected to announce real estate tax-related measures as early as the 10th. Kim Tae-nyeon, the Democratic Party floor leader, said at a policy coordination meeting that day, "We will prepare a comprehensive real estate measure covering taxation, finance, and supply," and "We will pass a bill in the July National Assembly session that significantly strengthens the comprehensive real estate holding tax on multi-homeowners."

Regarding the comprehensive real estate holding tax, the key issue is whether to lower the threshold?currently 900 million KRW for single-homeowners and 600 million KRW for multi-homeowners (based on official property value)?to broaden the scope and how much to raise the tax rate. There are also expectations that a new tax bracket will be created to increase the tax paid by multi-homeowners. Go said, "We are finalizing opinions on whether to adjust both the scope and the tax rate of the comprehensive real estate holding tax or just one of them."

In addition to the comprehensive real estate holding tax, a bill is expected to be introduced to strengthen property tax burdens specifically for multi-homeowners, drawing attention. Last month, Kim Hyun-mi, Minister of Land, Infrastructure and Transport, mentioned property tax on a broadcast, saying, "Some countries differentiate property tax rates depending on whether one is a multi-homeowner or a resident owner." Although the realization rate of official property prices has increased, raising overall property tax burdens, it seems likely that multi-homeowners, excluding single-homeowners, will face heavier burdens.

Regarding capital gains tax, on the 7th, Kang Byung-won, a Democratic Party lawmaker, proposed an amendment to the Income Tax Act to raise the tax rate to a maximum of 80% for real estate short-term sales under one year and up to 70% for sales within one to two years. Additionally, Park Hong-geun, also from the same party, is preparing an amendment to deny capital gains tax exemptions even to single-homeowners if they have rented out their property at least once after acquisition. There are also plans to create new acquisition price brackets under 300 million KRW and over 1.2 billion KRW to adjust acquisition tax rates both upward and downward, and to strengthen the comprehensive real estate holding tax for multi-homeowners while lowering it for first-time homebuyers.

The Democratic Party plans to establish an internal real estate task force (TF) to continuously develop measures. However, although some opinions have been raised about easing supply measures such as lifting parts of the Greenbelt or relaxing reconstruction regulations, it is reported that these are not being considered at the party level.

Public opinion supporting stronger taxation on multi-homeowners is higher than opposition. Realmeter announced on the 8th that a survey commissioned by tbs on strengthening the comprehensive real estate holding tax for multi-homeowners showed 53.5% in favor and 41.4% opposed. By ideological inclination, support was high among progressives with 74.6% in favor and 22.4% opposed, whereas conservatives showed 65.7% opposition and 30.6% support, showing a clear contrast.

The survey contacted 8,764 adults aged 18 and over nationwide, with 500 completing the responses, recording a response rate of 5.7%. The sampling error is ±4.4 percentage points at a 95% confidence level.

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