[Initial Reaction] Real Estate Measures That Sparked Tax Resistance

[Asia Economy Reporter Yoo In-ho] On the afternoon of the 13th, the search term 'Josejeohang Gukmin Undong' (Tax Resistance National Movement) became a hot topic on an internet portal. Around 2 p.m. that day, the term ranked high on the list, and about an hour later, it topped the real-time search rankings.

This was the result of netizens opposing the government's real estate policy repeatedly entering specific search terms on major portal sites, conducting a so-called 'real-time search challenge.' They actively share and promote the national movement's collective action methods through social networking services (SNS) such as Twitter and blogs.

The movement started in a Naver cafe where netizens who suffered from the government's recent tax strengthening-focused real estate measures on June 17 and July 10 gathered in protest.

The real-time search challenge began earlier this month. On the 1st, terms like 'Minister Kim Hyun-mi lies,' 'Constitution Article 13 Clause 2,' and 'June 17 Unconstitutional, Tears of the Working Class' appeared in the real-time search rankings.

On the 7th, 'Withdrawal of Moon Jae-in Support,' on the 8th, 'Retroactive Unconstitutional Corrupt Government,' and on the 9th, 'Ministry of Land, Infrastructure and Transport Audit Request' ranked high in search terms. This movement stems from the perception that although the government's measures claim to stabilize housing prices and protect actual buyers, the ones truly harmed are the working class and genuine buyers.

The government announced plans to raise acquisition tax rates for multi-homeowners up to three times, as well as significantly increase capital gains tax and comprehensive real estate tax. However, as the measures targeting multi-homeowners also sharply increase tax burdens on single-homeowners who are not speculators, opposition is growing.

In fact, the government plans to include the comprehensive real estate tax increase for single-homeowners (minimum 0.6%, maximum 3.0%) announced in the December 16 measures in the revised bill along with the July 10 measures.

As a result, criticism is pouring in that the government's explanation that "the purpose of the real estate measures is not to increase taxes" cannot be trusted. This is clearly reflected in the government's estimated scale of tax increases.

The Ministry of Strategy and Finance recently estimated the tax revenue effect from the comprehensive real estate tax rate hikes included in the December 16, June 17, and July 10 measures at about 1.65 trillion won through party-government consultations and other discussions. The adjustment of comprehensive real estate tax rates announced in the December 16 measures is expected to generate 424.2 billion won in tax revenue, and the application of a single tax rate to corporations and abolition of the 600 million won basic deduction announced in the June 17 measures is expected to increase comprehensive real estate tax revenue by 244.8 billion won.

With the additional adjustment of the heavy tax rate on multi-homeowners in the July 10 measures, a tax revenue effect of 986.8 billion won is expected.

Of course, it is currently difficult to accurately estimate the tax revenue effect from capital gains tax surcharges and others because it is uncertain how much supply will come to the market. The government also claims, "This reform is not aimed at increasing tax revenue but intends to stabilize the housing market and ensure fairness in real estate taxation."

However, few people take this at face value. The simultaneous strengthening of the comprehensive real estate tax, a holding tax, and capital gains tax, a transaction tax, has raised suspicions that this reform is intended to supplement recent tax revenue shortages.

"I personally own two houses due to personal circumstances but pride myself on not being a speculator. The country treats my lifelong property, built by not eating or wearing, as if I were a thief, even if I keep it or pass it on to my children."

This is a post by a netizen participating in the Josejeohang Gukmin Undong on a portal site. The frustration over real estate policy is palpable. The government, holding the power, should understand that if it does not wield the sword properly, such public resistance and frustration may continue.

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