Real Estate Legislative Battle... Ruling Party Emphasizes Tenants and Public Housing vs Opposition Party Advocates Tax Burden Relief

[Image source=Yonhap News]

[Asia Economy Reporter Park Cheol-eung] Since the beginning of this month, the ruling and opposition parties have been competitively proposing real estate legislative bills. While the ruling party focuses on increasing public housing and strengthening tenant protection, the conservative opposition parties are introducing bills to reduce tax burdens in response to the government's official land price realization. Following the 'three lease laws' including the right to request contract renewal, the real estate battle continues.

According to the National Assembly on the 9th, recently, Rep. Cheon Jun-ho of the Democratic Party of Korea proposed an amendment to the Urban and Residential Environment Improvement Act to ease regulations such as upgrading land use zones and designating special architectural districts for reconstruction projects involving public participation, such as the Korea Land and Housing Corporation (LH).

The aim is to expand housing supply and utilize part of the increased floor area ratio capacity for public housing. This aligns with the Democratic Party's policy to break away from private-led redevelopment or reconstruction projects and have the public sector supply quality rental housing. On the 5th, at the launch ceremony of the party's Future Housing Promotion Team, Democratic Party leader Lee Nak-yeon mentioned, "There may be ways to contribute to stabilizing real estate prices by expanding the purchase of housing stock in the metropolitan area through LH and SH corporations," and added, "We need to consider public reconstruction and public redevelopment models for community coexistence."

From the same party, Rep. Moon Jung-bok proposed an amendment to the Special Act on Public Housing to have the state bear part of the expenses when new schools are established in public housing districts and to relax facility installation standards. The government plans to supply 300,000 housing units in the metropolitan area, including the 3rd New Towns, but specific measures to expand school facilities have not been prepared. Rep. Moon also pointed out that so-called 'Chopuma' (apartments near elementary schools) are gaining attention mainly in the metropolitan area, driving up housing prices in nearby regions.

Democratic Party Secretary-General Rep. Park Kwang-on has introduced a bill to extend the lease guarantee period from the current '2 years + 2 years' to '3 years + 3 years,' sparking controversy. While it is positively evaluated for long-term housing stability, there are many concerns that it will further reduce jeonse (key money deposit) listings and cause prices to soar.

Additionally, Rep. Min Hong-chul of the Democratic Party proposed a bill to provide stronger protection for tenant deposits. The background for this proposal is cases where even after tenants register their move-in, if the landlord establishes a mortgage on the same day, the tenant becomes subordinate and loses deposit protection. The bill stipulates that once residents register their address and lease, immediate opposability (legal effect against third parties) will occur.

The Justice Party has consecutively proposed amendments to the Commercial Lease Act for self-employed individuals and others. Rep. Bae Jin-kyo proposed a bill that prohibits claims for rent and deposit increases within two years after the contract or increase, and Rep. Jang Hye-young proposed a bill allowing tenants to terminate contracts without deposit reduction if sales decrease by 50% or more compared to the same period last year.

The People Power Party's stance is to minimize tax burdens. Rep. Kwon Young-se proposed an amendment to the Local Tax Act to mandate local government heads' authority to adjust property tax flexible rates and to define disasters and special fiscal needs in other laws. Rep. Kwon pointed out, "Due to the government's recent policy to realize official prices, the property tax burden is expected to increase," adding, "In particular, the excess property tax in Seoul in 2020, when COVID-19 occurred, reached about 200 billion KRW, and the nationwide property tax cap taxation ratio is rapidly increasing." This aims to alleviate the excessive tax burden on ordinary citizens. In addition to Rep. Kwon, 20 other People Power Party lawmakers co-sponsored the bill.

Rep. Yoon Hee-sook of the People Power Party, who attracted attention with her remark "I am a tenant," introduced a bill to ease comprehensive real estate tax. It adds cases where elderly and long-term owners eligible for special deductions own a single house jointly with their spouse. From the same party, Rep. Park Hyung-soo proposed a bill that exempts corporations owning public rental or private construction rental housing with exclusive area of 149㎡ or less from the increased comprehensive real estate tax rate.

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