Ruling Party Raises 'Reduction of Rental Business Benefits' Again... Opposition Criticizes It as 'Shifting Responsibility for Housing Prices'

Reviewing Reduction of Rental Business Benefits Again After Last Year
Possibility of Excluding from Comprehensive Real Estate Tax and Reducing Capital Gains Tax Benefits
Rental Business Operators Protest "Highlighting Benefits Without Considering Obligations"
Criticism of Shifting Housing Price Responsibility as Resentment Over Comprehensive Real Estate Tax Grows

On the 27th, Jin Sun-mi, the special committee chairperson (second from the right), is speaking at the 1st meeting of the Democratic Party's Special Committee on Real Estate held at the National Assembly Members' Office Building.
[Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] The Democratic Party of Korea has once again brought up the 'reduction of benefits for rental business operators' card following last year, sparking growing opposition among rental business operators. Critics suggest that after the ruling party's defeat in the Seoul mayoral by-election and its unsuccessful attempts to ease the comprehensive real estate tax, it may be trying to shift the responsibility for rising housing prices onto rental business operators.

According to political circles and industry sources on the 27th, the first meeting of the Real Estate Special Committee held at the National Assembly Members' Office Building discussed measures including easing the loan-to-value ratio (LTV) on mortgage loans and reducing tax benefits for rental business operators. The purpose is to enhance fairness by reducing benefits for rental business operators who receive acquisition tax reductions, exclusion from the comprehensive real estate tax, and exemption from capital gains tax surcharges, as the tax burden on ordinary citizens has increased due to recent rises in publicly announced property prices.

In fact, within the Democratic Party recently, there have been continuous calls to reduce benefits for rental business operators to stabilize housing prices. Woo Won-sik, a candidate in the Democratic Party leadership race, said at an MBC candidate debate the day before, "A bill to eliminate special privileges for rental business operators should be passed to create supply." Kim Doo-kwan, a lawmaker from the same party, pointed out that about 53% of housing units under 40㎡ in Seoul are owned by rental business operators and argued, "Providing various tax benefits to rental business operators is the biggest cause of the housing price surge."

In response, rental business operators are showing resistance. They argue that mentioning benefit reductions again is excessive, given that the apartment purchase rental system was abolished and regulations such as mandatory subscription to guarantee insurance and regular joint inspections were strengthened last year through the July 10 measures and the revision of the Special Act on Private Rental Housing.

For small housing units such as one-room or 1.5-room apartments under 40㎡, which are generally preferred for rent rather than purchase by young people starting their careers, it is pointed out that ownership by rental business operators is not significantly related to the recent sharp rise in apartment prices. Therefore, among rental business operators, there is dissatisfaction that this issue is an attempt to blame rental business operators for the public's resentment over the responsibility for rising housing prices and tax burdens caused by the failure of real estate policies.

The Korea Landlords Association, composed of rental business operators, plans to visit the Ministry of Land, Infrastructure and Transport on the 28th to convey difficulties arising from last year's regulatory strengthening and express their protest. It is expected that they will mainly request clarification of confusion on the front lines caused by rapid regulations and coordination between ministries.

Sung Chang-yeop, president of the Korea Landlords Association, pointed out, "The benefits received by rental business operators are tax special cases granted in return for fulfilling obligations such as compliance with rental periods and restrictions on rent increases," adding, "It is inappropriate to simply talk about reducing exclusions from the comprehensive real estate tax or special cases for capital gains tax without adjusting these obligations."

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