Revival of Land Public Concept 'Land Excess Profit Tax' Under Review Even by Ruling Party

If Idle Land Prices Rise Above Average, Some Will Be Reclaimed by the National Treasury

At a press conference held on the 8th at the People's Solidarity for Participatory Democracy in Jongno-gu, Seoul, participants are holding up placards during the announcement of the five major tasks to eradicate real estate speculation and recover investment profits. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Park Cheol-eung] Not only the Justice Party but also ruling party lawmakers are considering the revival of the Land Excess Profit Tax Act based on the concept of public land ownership. Civic groups such as the People's Solidarity for Participatory Democracy and the Lawyers for a Democratic Society (Minbyun), who exposed speculative incidents involving some employees of Korea Land and Housing Corporation (LH), are actively promoting this, and legislative discussions may become full-fledged depending on political movements.

The Land Excess Profit Tax is called one of the "Three Laws on the Concept of Public Land Ownership," along with the Land Ownership Limit System and the Development Profit Recovery System. It is a system that recovers part (30-50%) of the profit to the national treasury when the price of idle land, which is practically "unused land" outside of agricultural, residential, production, or business purposes, rises above the national average. It was introduced in 1990 during the Roh Tae-woo administration and disappeared during the 1998 financial crisis, but discussions on its revival have become active recently due to incidents such as the Korea Land and Housing Corporation (LH) speculation case.

Lee Hae-sik, a lawmaker of the Democratic Party of Korea, said in a phone interview with Asia Economy on the 26th, "It is necessary to reintroduce the Land Excess Profit Tax," adding, "Considering the past constitutional controversy, we are reviewing a slightly softened form that does not damage the purpose of the system. We plan to decide after consulting with the party's Policy Committee."

At a National Assembly Budget and Accounts Special Committee meeting last month, Rep. Lee also said, "The Land Excess Profit Tax Act can be enacted under current laws, and Article 122 of the Constitution clearly states that 'restrictions and obligations may be imposed as prescribed by law for the efficient, balanced use, development, and preservation of national land,'" adding, "The government needs to legislate based on this concept of public land ownership."

At that time, Prime Minister Chung Sye-kyun responded, "I believe our society has not sufficiently reflected the constitutional spirit of the concept of public land ownership, so efforts to reflect that spirit would align with public sentiment." He continued, "Especially in the current situation where the LH issue has surfaced, such claims or opinions are likely to be more strongly expressed," and said, "There are legislative discussions that include such content, and I will actively cooperate to ensure the legislation succeeds."

The Democratic Party recently formed a Real Estate Special Committee to discuss easing loan regulations for the homeless and reducing tax burdens for one-homeowners, but at the same time, there is an urgent need for measures to eradicate the evils of land speculation revealed by the LH incident.

Civic groups such as the People's Solidarity for Participatory Democracy plan to hold a press conference on the 27th to emphasize the necessity of legislating the Land Excess Profit Tax and to disclose the prepared bill contents. It is also reported that Shim Sang-jung of the Justice Party is preparing to propose related legislation.

Kim Nam-geun, a lawyer and policy committee member of the People's Solidarity for Participatory Democracy, explained at a recent forum, "It is often claimed that the Land Excess Profit Tax was abolished due to a constitutional ruling, but the Constitutional Court did not find the taxation on unrealized gains unconstitutional in essence. Rather, it declared many administrative convenience and hasty legislative provisions unconstitutional," adding, "Subsequent amendments have completely eliminated the possibility of unconstitutionality."

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