Kim Hyun-mi "Real Estate Measures Not for Tax Increase... Will Recover Unearned Income"

Minister Kim Appears on Radio to Explain July 10 Measures
"We Are Sorry for the Situation Caused by Our Mistakes"
On Housing Supply Shortage Claims: "That Is Not the Case"

Minister of Land, Infrastructure and Transport Kim Hyun-mi is answering reporters' questions at a briefing on follow-up measures to the June 17 real estate policy held at the Government Seoul Office Building on the morning of the 10th. (Photo by Yonhap News)

[Asia Economy Reporter Moon Jiwon] Minister of Land, Infrastructure and Transport Kim Hyun-mi explained that the 7·10 real estate measures have significantly increased the tax burden not only on multi-homeowners but also on actual residents, stating, "The purpose is not to increase taxes," and added, "It is a measure to eliminate unearned income in the real estate market."

Minister Kim made these remarks on the morning of the 14th during an appearance on tbs Radio's 'Kim Eo-jun's News Factory,' explaining the recently announced 7·10 real estate measures by the government.

In response to the question, "There is criticism that the 7·10 measures are not real estate measures but tax increases," she emphasized, "There is no need to use such tax systems just to increase taxes," and added, "The purpose is not tax increase but a systemic change to prevent unearned income in real estate."

She further explained, "For actual demanders owning one house, there is almost no change (even with the measures). The increase in tax burden applies only to about 0.4% of the total, who are multi-homeowners with two or more houses, or three or more houses in regulated areas, so there is almost no tax burden on actual owners of one house."

Regarding concerns that multi-homeowners might resort to gifting properties instead of selling them due to increased capital gains tax burden under the new measures, Minister Kim said, "Therefore, we are reviewing measures with the Ministry of Economy and Finance to ensure that gifting is not more advantageous than selling."

Addressing worries that even if multi-homeowners dispose of properties, demand might concentrate on the highly profitable 'smart one house,' she predicted, "Measures such as banning mortgage loans on high-priced houses over 1.5 billion won are already in place, so such phenomena are unlikely to intensify."

When asked about dissatisfaction among young people who find it difficult to buy homes due to successive government real estate policies, she said, "We know that some young people think about buying a house even if it means overextending themselves," and emphasized, "However, if everyone overextends, the market overheats and house prices rise. I believe it is important for young people to buy homes in a market that is not overheated and where prices are stable."

She added, "Although it may seem like a small part, the measures include expanding first-time supply for young people and increasing pre-supply in the 3rd new towns to broaden opportunities for home ownership," and said, "The government will do its best so that young people do not become too anxious."

Regarding concerns that the new measures might cause a sharp rise in jeonse and monthly rent prices, increasing tenants' burdens, she said, "The so-called 'Lease 3 Laws'?the right to request contract renewal, the rent ceiling system for monthly and jeonse rents, and related bills?have been submitted to the National Assembly," and added, "If these bills pass, the new laws will apply to existing tenants as well, preventing landlords from excessively raising rents."

Minister Kim denied the criticism that there is a shortage of housing supply. She explained, "More than 40,000 apartments are supplied annually in Seoul, and in the past three years, the number of permits, construction starts, and move-ins in Seoul have been 20-30% higher than average."

Regarding concerns that the government's abolition of apartment purchase registered rentals might cause speculative demand to shift to multi-family houses or officetels, she said, "Through the 9·13 measures, tax benefits are no longer given when newly purchasing houses for rental registration," and stated, "Such a balloon effect cannot occur."

Minister Kim expressed, "If we had implemented fundamental measures earlier, the public would not be experiencing such difficulties now, so I feel sorry that this situation has arisen due to our shortcomings," and added, "I believe that once the tax reform plan to recover unearned income from real estate and the Lease 3 Laws are passed, housing stability and welfare will be achieved."

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