Ruling and Opposition Only Reconfirm Differences on Comprehensive Real Estate Tax Law... Ministry of Economy and Finance Supports 'Top 2%' Proposal

The Democratic Party Plans to Pass 'Top 2% Comprehensive Real Estate Tax' at Tax Subcommittee on 19th... Government Also Agrees
Opposition: "A Tax System Nowhere to Be Found in the World"

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] The National Assembly's Planning and Finance Committee discussed the amendment to the Comprehensive Real Estate Tax Act but only reaffirmed disagreements. The Ministry of Economy and Finance, which had initially maintained a fundamental stance, was confirmed to have expressed support for the Democratic Party of Korea's bill to impose the comprehensive real estate tax on the "top 2%."

According to the National Assembly on the 17th, the ruling and opposition parties held a tax subcommittee meeting of the Planning and Finance Committee in the afternoon, attended by Lee Okwon, the first vice minister of the Ministry of Economy and Finance, and Kim Taeju, head of the Tax Policy Bureau, to discuss the amendment to the Comprehensive Real Estate Tax Act but only confirmed differences. From the Democratic Party, Representatives Kim Youngjin, Ko Yongjin, Park Honggeun, Kim Suheung, Jung Ilyoung, and Kim Jooyoung attended, while from the People Power Party, Representatives Park Hyungsu, Ryu Seonggeol, and Yoo Kyungjun were present.

The Democratic Party argued that specifying the top 2% in the law, in line with the purpose of introducing the comprehensive real estate tax, would eliminate future confusion and conflicts surrounding the tax. In contrast, the People Power Party stated that if the house price threshold for imposing the tax on the top 2% changes annually, it would be unpredictable and increase confusion. They are advocating raising the tax base from 900 million won to 1.2 billion won.

Park Hyungsu, a People Power Party lawmaker who attended the tax subcommittee, told Asia Economy in a phone interview, "No country in the world sets the tax base by ratio," and pointed out, "If you think it is efficient to pay taxes by ratio, then the non-taxable threshold for capital gains tax and others should also be changed to ratios."

Ryu Seonggeol, another People Power Party lawmaker who attended the meeting, also said, "It is problematic to round off at the 10 million won unit when setting the 2% threshold," adding, "Even looking at the entire tax law, there is no case where a portion of the top is separated and the target is set by ratio."

The amendment bill proposed by Yoo Dongsu of the Democratic Party includes imposing the comprehensive real estate tax on "the publicly announced price of houses corresponding to the top 2% as determined by Presidential Decree" and states that "amounts less than 100 million won are rounded off." Controversy arose because the calculation of the house price corresponding to the top 2% rounds off at the 10 million won unit to calculate the tax in units of 100 million won.

Yoo Kyungjun of the People Power Party criticized the top 2% imposition, saying, "No matter how much house prices rise, the top 2% must pay taxes, and conversely, even if prices fall, if you belong to the top 2%, you must pay unconditionally," calling it a "punitive tax system that divides the people." He added, "If you rather present an absolute amount like 1.1 billion won as the threshold, there is room for discussion," but said, "I cannot agree with setting 2% and rounding off in the enforcement decree."

Meanwhile, opposition lawmakers sharply criticized the Ministry of Economy and Finance, which expressed support for the "top 2% bill."

Representative Park said, "The Ministry of Economy and Finance took a reserved stance during the last tax subcommittee discussion, saying it was a member's bill, but this time it completely sided with the ruling party and said it supports it," criticizing the government's attitude. Representative Yoo also said, "I asked if the bill was reviewed by the Legislation Office, but there was no clear answer," adding, "If there is a problem with the tax system, the ruling party should be persuaded to correct it."

It was confirmed that the Ministry of Economy and Finance expressed support for the comprehensive real estate tax bill imposing the tax on the top 2%.

Meanwhile, the ruling party plans to process the amendment to the Comprehensive Real Estate Tax Act at the plenary session on the 25th. A ruling party lawmaker who attended the tax subcommittee said, "Since the comprehensive real estate tax notice will be issued in November, there is a position that the Comprehensive Real Estate Tax Act should be processed as soon as possible," adding, "Although agreement among the floor leaders is necessary, a conclusion must be reached as quickly as possible."

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