Gathering Opinions Today on '2% Comprehensive Real Estate Tax Proposal'... Decision at General Meeting on 11th

[Image source=Yonhap News]

[Asia Economy Reporter Koo Chae-eun] The 'Top 2% Comprehensive Real Estate Tax (종부세) Plan' is expected to be finalized around the 11th through a party members' meeting, following academic and legal community discussions on the 8th and a meeting with the Seoul Metropolitan Council's chairpersons. While Song Young-gil, leader of the Democratic Party of Korea, and Kim Jin-pyo, head of the Special Real Estate Committee, are advocating for its introduction, significant criticism within the party makes a difficult process inevitable.

The special committee has prepared a plan to ease the 종부세 application criteria from 'officially assessed price exceeding 900 million KRW' to 'top 2% of officially assessed prices,' and to raise the capital gains tax exemption threshold for one-household one-homeowners from 900 million KRW to 1.2 billion KRW. Regarding the 종부세 reform plan, the criteria are set as a ratio, so if the overall officially assessed prices rise, the 종부세 imposition threshold also rises, and if the prices fall, the threshold lowers accordingly. The logic is that there is no need to adjust the baseline every time housing prices fluctuate; only homes in the top officially assessed price bracket would be subject to property tax.

The Democratic Party will begin a process of gathering opinions through an expert discussion in the morning and a policy party meeting on the 11th. Participants in the discussion include Professors Shim Chung-jin, Oh Moon-sung, Jung Se-eun, Han Moon-do, CEO Chae Sang-wook, and lawyer Yoo Cheol-hyung, with Kim Jin-pyo, the committee chair, and Yoo Dong-su, the secretary, attending from the party. Kim Jin-pyo emphasized on a radio show last month, "If we implement the top 2% plan, we won't have unnecessary debates every time prices fluctuate," adding, "The system will become very simple, and we want to reform it accordingly." Leader Song is also actively pushing this plan. On the 1st, Song stated, "I proposed the top 2% 종부세 plan," lending support to the special committee's proposal. In a media interview on the 6th, he reaffirmed his stance on a direct breakthrough, saying, "Among people who own apartments in Seoul, one in four pays 종부세. There is a need to make this realistic."

However, there is also opposition. Some hardliners view the 종부세 reform as a 'tax cut for the rich.' At the policy party meeting held on the 27th of last month, opinions for and against the 종부세 easing plan clashed fiercely. At that meeting, Representative Jin Sung-jun strongly opposed it, saying, "The priorities are reversed," and Representative Park Joo-min also said, "Tax relief should be approached cautiously." Amid the intensifying discussion on easing 종부세 within the party, a leadership official stated, "There is a view that the result of the April 7 by-election itself was a 'tax election,' and there are opinions that the 종부세 plan should be adjusted accordingly, but there is fierce debate among members," adding, "We will strive to quickly gather opinions within the party."

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