Democratic Party's 'Selective' Opinion Gathering... Real Estate Measures 'Squeak'

Choo Mi-ae: "The Party and Government Should Raise the Effective Tax Rate on Property Holding Tax, Not Reduce Property Tax"

[Image source=Yonhap News]

[Asia Economy Reporter Park Cheol-eung] #. On the 17th, a banner reading 'The Democratic Party Real Estate Special Committee - Seoul District Mayors Policy Issue Meeting' was hung in a conference room at the National Assembly Members' Office Building. Voices calling for lowering not only property tax but also comprehensive real estate tax (종부세, Jongbu-se) and easing reconstruction regulations were known under the name of 'Seoul district mayors.'

#. On the 20th, the Seoul District Mayors Association held a meeting and decided not to accept the joint proposal from Seoul City and autonomous districts regarding property tax reduction suggested by Seoul Mayor Oh Se-hoon. Lee Dong-jin, mayor of Dobong District and chairman of the District Mayors Association, said, "There was also an opinion that the deprivation or alienation felt by the 50% of Seoul citizens who are non-homeowners should be considered."

The change in the district mayors' stance over a few days was not because their opinions shifted, but because the Democratic Party special committee meeting was a gathering with only some district mayors. It involved seven autonomous districts: Gangnam, Songpa, Gangdong, Yangcheon, Yeongdeungpo, Nowon, and Eunpyeong. Since these areas are concentrated with high-priced apartments, the emphasis was on reducing tax burdens. However, public sentiment across all of Seoul was different.

Mayor Lee conveyed the meeting atmosphere, saying, "Lowering property tax for owners of relatively high-priced homes could cause a sense of deprivation among ordinary citizens."

While it is necessary to listen to public opinion from regions with relatively high tax burdens, considering that tax adjustments affect the entire country, there are criticisms that a wider range of opinions should have been collected. A Democratic Party official said, "Usually, to gather public opinion from each autonomous district, the District Mayors Association is used, but this time, only district mayors from areas with high housing prices were met, which was puzzling."

Earlier this month, right after Song Young-gil took office as party leader, the Democratic Party changed the chairperson of the Real Estate Special Committee from Representative Jin Sun-mi to Representative Kim Jin-pyo. Representative Kim, a former Deputy Prime Minister of Economy and a bureaucrat, is regarded as a conservative figure within the party. The new Democratic Party leadership described livelihood as the 'front wheel' and reform as the 'rear wheel,' accelerating efforts to prepare real estate measures as the top priority for livelihood.

The direction was set. The plan was to reduce tax burdens and lower the threshold for loans. It is known that at the previous day's Real Estate Special Committee meeting, a policy was decided to expand the property tax reduction target from a publicly announced price of 600 million KRW to 900 million KRW. More time is needed to gather party consensus on loan regulations, capital gains tax, and comprehensive real estate tax.

Although real estate measures are being prepared as part of analyzing the causes of the by-election defeat and party reform, there has been considerable criticism that the diagnosis and prescription were flawed from the start. The leadership is said to have set policies and only listened to favorable opinions.

Former Minister of Justice Chu Mi-ae criticized on Facebook the day before, saying, "The party and government should not reduce property tax but rather steadily increase the effective tax rate on real estate holding tax," and pointed out, "(Property tax reduction) is merely a symptomatic treatment that panders to the dual psychology of wanting home prices to rise while paying less tax."

Also, the Housing Rights Network, composed of civic groups including the People's Solidarity for Participatory Democracy, criticized in a recent press conference, "Non-homeowner tenants are suffering from housing instability and deepening asset inequality caused by soaring house prices, but the Democratic Party is essentially submitting a confession to ease real estate taxation for homeowners."

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