Kim Jin-pyo: "The 2% Comprehensive Real Estate Tax Rule Resolves Tax Resistance of Good-Faith Single-Homeowners... Housing Price Stability Should Be Induced by Supply Policies and Interest Rates"

Kim Jin-pyo, Chairman of the Real Estate Special Committee
Mentions 'Tax Resistance of Single-Home Owners'
Housing Price Stability Should Be Induced Through Supply Policies

Kim Jin-pyo, Chairman of the Real Estate Special Committee of the Democratic Party of Korea, is announcing additional supply measures to stabilize the housing market at the National Assembly Communication Office on the 10th. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Koo Chae-eun] Kim Jin-pyo, Chair of the Real Estate Special Committee of the Democratic Party of Korea, said regarding the party-approved ‘Comprehensive Real Estate Tax Top 2% Rule’ that "it was necessary to resolve the issue of tax resistance caused by a sharp increase in tax burden even on small, well-intentioned single-household homeowners." In response to criticism that the 2% rule contradicts the policy goal of ‘real estate price stabilization,’ he said, "Housing price stability can be induced through supply policies such as the ‘Nuguna Jip (Anyone’s House) Project.’"

On the 21st, Kim appeared on KBS’s ‘Choi Kyung-young’s Strong Current Affairs’ and explained the decision to adopt the ‘2% rule’ as party policy, saying, "During the April 7 by-elections, lawmakers who met many taxpayers reported a tax explosion. Losing by 890,000 votes in Seoul alone, it was impossible not to consider realistically whether we could win the presidential election." He added, "In places like Seongdong-gu, up to 40% of apartment owners pay the comprehensive real estate tax, and in Gangnam, it exceeds 60%."

He also mentioned that the amount of tax reduction due to the 2% rule is not large. Among the total 860,000 comprehensive real estate tax payers, only about 90,000 pure single-household homeowners are excluded from taxation as the tax base is raised from 900 million KRW to the top 2%. Consequently, the amount of tax revenue lost is 65.6 billion KRW, which is about 1.2% of the total comprehensive real estate tax revenue (5.8 trillion KRW). He said, "Although the tax revenue is small, the problem of tax resistance caused by the explosive increase had to be resolved."

He emphasized that supply measures are important for housing price stabilization and that the ‘Nuguna Jip’ model was announced, with plans to promote such projects through the government, the party, and the Seoul Metropolitan Council task force. Nuguna Jip is a flagship project promoted by Party Leader Song Young-gil since his time as Mayor of Incheon in 2014. The core idea is that residents pay only 16% of the house price (10% for purchase rights + 6% for residency rights) and can live there for 10 years, after which they have the right to purchase at the initial sale price. Kim also added that since the Bank of Korea mentioned the possibility of interest rate hikes in the second half of the year, housing prices are expected to stabilize.

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