Yeo "No Change in Comprehensive Real Estate Tax Policy to Curb 'Unearned Income' of Multi-Homeowners"

Maintaining Existing Policies on Comprehensive Real Estate Tax and Lease 3 Laws
Revision of Comprehensive Real Estate Tax Aims to "Correct Fairness"

[Image source=Yonhap News]

[Asia Economy Reporter Park Jun-yi] Kim Seong-hwan, Chairman of the Policy Committee of the Democratic Party of Korea, emphasized that regarding the Democratic Party's real estate policy stance, "We believe that speculative real estate gains through multiple home ownership should be suppressed as much as possible, so there is no change in our position to maintain this stance." However, he dismissed the proposed amendment to the Comprehensive Real Estate Tax Act, which was adopted as the party's official position, as "an issue of correcting fairness."

On the 14th, Chairman Kim held a press briefing at the National Assembly and stated, "Whether it is a single-home household or multiple-home ownership, the core of the tax policy from the last party meeting was to set the comprehensive real estate tax threshold at 1.1 billion KRW."

He explained, "The comprehensive real estate tax threshold for single-home households is 1.1 billion KRW. However, for multiple-home owners, the threshold is 600 million KRW, which means that even assets with less value than a well-chosen single home are subject to the tax, raising fairness issues that need to be corrected."

Earlier, 15 Democratic Party lawmakers proposed a partial amendment to the Comprehensive Real Estate Tax Act in May, aiming to ease the tax threshold for multiple-home owners from the current combined official assessed value of 600 million KRW or more to 1.1 billion KRW. This was part of former leader Song Young-gil's Seoul mayoral campaign pledges and was adopted as the party's official stance.

Chairman Kim explained, "Looking ahead, we predict that the People Power Party is very likely to try to shake the progressive tax system for multiple-home owners' comprehensive real estate tax."

He added, "Our party's real estate policy principle is to balance three aspects: housing stability and homeownership opportunities for the homeless, reasonable tax burdens for single-home owners, and suppression of multiple-home ownership through appropriate tax systems." He further noted, "What we focused on in the last party meeting was the increased property tax burden on single-home owners, which unintentionally rose sharply due to the increase in housing prices during the Moon Jae-in administration."

In particular, he said, "If the property tax burden cap for properties with an official assessed value over 600 million KRW is 130%, theoretically, the property tax doubles after three years. Since the increase in property value does not immediately realize profits unless sold, we propose to strengthen the cap to allow tax burdens to increase within a reasonable range, which is different from a tax cut for the wealthy."

Regarding the three lease laws, he also explained, "Recently, with significant interest rate hikes, the prices of jeonse and monthly rent have been stabilizing. There are concerns about rent increases during new contracts, and I understand that laws have been proposed to supplement and suppress such increases as much as possible."

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