Won Hee-ryong: "Need to Review Whether Jaechohwan and Bunsangje Are Appropriate... Various Tax System Reforms Also Necessary"

"Excessive Capital Gains and Development Profit Recovery Needed, but Current System Must Be Reviewed"
Reform of Tax Systems Including Comprehensive Real Estate Tax Also Necessary

Won Hee-ryong (center), Minister of Land, Infrastructure and Transport nominee and Planning Committee Chair of the 20th Presidential Transition Committee, visited the construction site of Section 6 of the Greater Metropolitan Express Railroad (GTX) Line A in Seongdong-gu, Seoul, on the morning of the 21st. He is seen asking questions to on-site personnel regarding the GTX project. [Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] Won Hee-ryong, the nominee for Minister of Land, Infrastructure and Transport, stated that he will thoroughly review the appropriateness of real estate policies such as the Reconstruction Excess Profit Recovery System (재초환) and the Sale Price Ceiling System (분상제). He also expressed the need for tax reforms, including the comprehensive real estate tax (종부세).

On the 30th, Won made these remarks in his written responses submitted to the National Assembly for his confirmation hearing. He answered this way in response to related questions from Park Sang-hyuk, a member of the Democratic Party of Korea.

Regarding 재초환, he said that it is necessary to recover excessive capital gains or development profits at an appropriate level, but he will carefully review whether the current system is appropriate. About 분상제, he said, "I understand that side effects such as a decrease in sales have occurred in some areas," and added, "I will look into points to be supplemented in the price calculation process and consider improvement measures."

He also stated that the 'Officially Announced Price Realization Roadmap' implemented by the Moon Jae-in administration needs supplementation. Won explained, "We will review the realization plan through research projects and prepare supplementary measures to prevent excessive holding burdens," and added, "Since the method of calculating the officially announced price still needs improvement, we will strive to enhance the accuracy and reliability of the officially announced price."

He emphasized the need for tax reforms related to real estate. In response to questions about the 종부세, he said, "Since there was inconvenience to the public due to excessive tax burdens, it is necessary to normalize the tax burden to an appropriate level through reasonable tax reform measures."

Regarding the abolition of the 종부세 or integrating it with property tax, he took a somewhat general stance. He said, "Under the broad policy goal of housing stability, we will comprehensively consider various aspects such as the housing market situation, tax efficiency and equity, and tax revenue, and work with tax authorities to prepare reasonable tax reform measures."

He stated that he will approach the proposal to establish a 'Housing Agency' cautiously. Regarding the introduction of land lease-type and repurchase condition housing, he hinted at possibilities, saying, "In a situation where it is becoming difficult for low-income and non-homeowners to own a home, it is necessary to consider various forms of housing supply."

Meanwhile, he acknowledged both merits and demerits of the Moon Jae-in administration's real estate policies. He criticized, "Tax and loan regulations to suppress demand distorted the housing market and caused inconvenience and burdens to the public," but also responded, "There were achievements such as securing public rental housing stock above the OECD average and expanding housing benefits."

He also recognized the achievements of the Moon administration's '2·4 Supply Plan.' Won said, "There were achievements in supplying housing quickly and affordably within urban areas," and added, "We will actively continue and promote the plan in areas with high demand and strong resident support."

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