Democrats Propose Tax Freeze Bill Following Rent Freeze Law... Legalizing Benefits for 'Good Landlords'

Democratic Party Lawmaker Dongju Lee, Bill to Be Proposed Soon

Lee Nak-yeon, leader of the Democratic Party of Korea, is attending the Supreme Council meeting at the National Assembly on the 16th and delivering a speech. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Wondara] The Democratic Party of Korea plans to propose a 'Tax Freeze Act' following the 'Rent Freeze Act.' The main points include legalizing a 50% tax reduction benefit for benevolent landlords and extending tax benefits to rent reductions for workplaces with 10 or more employees.

A staff member from the office of Democratic Party lawmaker Lee Dong-joo, who proposed the Rent Freeze Act, said in a phone interview with Asia Economy on the 16th, "We will propose an amendment to newly establish Article 96-3, Paragraph 2 of the Restriction of Special Taxation Act." The newly established clause states that "landlords who reduce rent shall be allowed to deduct 50% of the rent reduction amount, as determined by Presidential Decree, from their income tax or corporate tax."

Although the existing Benevolent Landlord Act was extended until June next year, there were criticisms that its effectiveness was limited due to reliance on landlords' goodwill. Additionally, benevolent landlords who provided rent reductions to workplaces with 10 or more employees or small and medium-sized enterprises (SMEs) were not eligible for these benefits despite offering rent reductions.

The lawmaker’s office explained, "The core of the proposal is to legalize the tax reduction benefits for benevolent landlords, which were previously at a recommendation level," adding, "We also plan to relax the clause limiting benefits to small business owners as defined by Presidential Decree, thereby expanding tax reduction benefits to benevolent landlords who provide rent reductions to workplaces with 10 or more employees and SMEs." The Democratic Party is scheduled to discuss these rent-related measures at a policy lawmakers' meeting on the 17th.

However, in political circles, there is an analysis that the Rent Freeze Act previously proposed by the lawmaker is practically difficult to implement. The Rent Freeze Act aims to reduce rent by 50% for businesses subject to gathering restrictions and exempt rent for businesses under gathering bans.

Hong Se-wook, a legal advisor to the People Power Party’s Real Estate Special Committee, said, "It violates property rights, freedom of contract, and the principles of market economy order," adding, "There is a possibility of unconstitutionality." The burden is also increased by the fact that the Private Rental Business Association is preparing a constitutional lawsuit against the 'Three Lease Laws.' A political insider said, "Considering the Seoul mayoral election and others, it will be difficult for the Democratic Party to push this as a party line."

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