Byeon Chang-heum: "Tax Burden on Multi-Homeowners and Owners of High-Value Homes Must Be Strengthened"

Nominee for Minister of Land, Infrastructure and Transport Chang-Hoon Byun (Provided by Ministry of Land, Infrastructure and Transport)

[Asia Economy Reporter Lee Chun-hee] Byun Chang-heum, the nominee for Minister of Land, Infrastructure and Transport, stated that it is inappropriate to describe the increased tax burden on multi-homeowners and owners of high-priced homes as a 'tax bomb.'

In response to a question from Kang Jun-hyun, a member of the Democratic Party of Korea, who pointed out that the recent government and ruling party's increases in comprehensive real estate tax, capital gains tax, and property tax have been called a 'tax bomb,' Byun answered in the written response submitted to the National Assembly on the 21st, "According to the principle of fair taxation, the more houses one owns and the higher the price of the houses, the greater the tax burden should be." He added that it is inappropriate to call this a tax bomb.

Byun emphasized that the government's strengthening of real estate-related tax rates was a measure "to reorganize the housing market to focus on actual demand." He stressed that the actual tax rate increases were limited only to multi-homeowners and speculative housing purchases such as short-term transactions. He also added that various tax reduction benefits are currently applied to single-homeowners with the purpose of actual residence.

In response to Kang's question on whether he considers Korea's real estate-related tax burden rate to be at an appropriate level, Byun replied, "As of 2018, the proportion of property tax relative to GDP was lower than the average of the Organization for Economic Cooperation and Development (OECD)." Byun explained that while the OECD average was 1.1%, Korea's was 0.9%. He further elaborated that the government is promoting the realization of official property prices and that, through the July 10 real estate measures, the tax burden on multi-homeowners and corporations has been increased, so the tax burden rate is expected to rise further.

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