Opposition's Real Estate Measures Unveiled... 'Introduction of Official Price Ceiling System and Easing of Loan Regulations for Non-Homeowners' (Comprehensive)

Opposition: "Let's Work Together to Solve Real Estate Issues at the June Extraordinary National Assembly"

[Asia Economy Reporter Naju-seok] The People Power Party announced real estate measures on the 24th aimed at easing loan regulations for the homeless and reducing the tax burden for owners of one primary residence. For the homeless, including youth and newlyweds, the party proposed raising the Loan-to-Value ratio (LTV) and Debt-to-Income ratio (DTI), and applying a 5% cap on official property prices starting this year.

On this day, the People Power Party Policy Committee announced real estate measures aimed at correcting the Moon Jae-in administration's real estate policies. The core of this plan is to expand opportunities for homeownership for the homeless and to reduce the burden on owners of one primary residence.

[Image source=Yonhap News]

First, the exemption period for acquisition tax on low-income housing for primary residence purposes will be extended from the end of this year to the end of 2024. The criteria for acquisition tax reduction will also be expanded from the current 70 million KRW or less to 90 million KRW or less, and the housing price limit will be raised from 400 million KRW to 600 million KRW in the metropolitan area.

To help actual demanders secure housing, the LTV and DTI preferential rates for the homeless, including youth and newlyweds, will be increased from the current 10 percentage points to 20 percentage points, and income and housing price criteria will also be raised. Additionally, the Debt Service Ratio (DSR) for first-time buyers such as youth and newlyweds will be relaxed from 40% to 50%.

As a short-term measure, the plan includes a postponement of the capital gains tax surcharge on multiple homeowners starting from the 1st of next month to ease the housing market. A People Power Party official explained, "The goal is to prevent a transaction freeze by postponing the capital gains tax surcharge and providing sufficient time for housing transactions."

To reduce the burden on owners of one primary residence, the party promised to introduce a cap on the increase of official property prices. The cap will limit the increase rate to 5% compared to the previous year. In particular, the cap will be applied immediately from this year's official property prices to curb the nationwide increase of over 19%.

The special property tax criteria will also be raised from the current 600 million KRW to 1.2 billion KRW to reduce the tax burden. Furthermore, the comprehensive real estate tax exemption threshold will be raised from 900 million KRW to 1.2 billion KRW, and the fair market value ratio will be frozen at last year's level, increasing the deduction rate for elderly and long-term owners of one home up to 90%.

Additionally, the capital gains tax exemption threshold for one household, one primary residence will be raised from 900 million KRW to 1.2 billion KRW.

Lee Jong-bae, chairman of the People Power Party Policy Committee, said, "This real estate measure by the People Power Party is a stabilization plan that practically helps the homeless and owners of one primary residence," adding, "We hope the Democratic Party will quickly organize its position and work together in the June extraordinary session of the National Assembly to solve the difficulties of homeownership and tax issues that have worsened under this administration."

[Image source=Yonhap News]

Regarding the Democratic Party faction's proposal to raise the LTV to 90% for actual demand homeless, the chairman said, "That is an excessive loan," and added, "I thought it might excessively increase national debt." He continued, "If we increase LTV and DTI by 10 percentage points each, that would also be quite helpful." The chairman criticized, "We proposed forming a bipartisan consultative body to solve real estate issues, but the ruling party has been completely silent so far."

Meanwhile, Kim Gi-hyeon, acting party leader and floor leader of the People Power Party, said, "People are suffering from the pain of not being able to own a home, the pain of owning a home, and the pain of wanting to sell a home but being unable to," and criticized, "President Moon Jae-in boasted that he was confident in controlling the real estate problem, but only the innocent low-income and homeless residents were caught."

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