"Smart Single Home Must Be Owner-Occupied for Deduction Benefits"... Democratic Party Pushes Amendment for Long-Term Ownership Special Deduction

Kim Seong-hwan, Democratic Party Policy Committee Chairman Meeting
Also Promoting Amendment to Public Institution Operation Act to Align Presidential and Institution Heads' Terms

Kim Seong-hwan, Chairman of the Policy Committee of the Democratic Party of Korea, is attending the Policy Coordination Meeting held at the National Assembly on the 4th and delivering an opening remark. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Naju-seok] The Democratic Party of Korea is pushing for a bill to reduce the long-term holding special deduction benefits for ‘smart single-home owners’ who own a property without actually residing in it.

On the 23rd, Kim Seong-hwan, the chairman of the Democratic Party’s Policy Committee, held a press briefing and explained that they plan to promote such a bill.

Currently, a single household with one home can receive up to an 80% capital gains tax deduction, including a 40% deduction for the residence period and a 40% deduction for the holding period if they hold the property for up to 10 years. The Democratic Party plans to raise the residence period deduction rate from 4% to 6% by 2 percentage points, while lowering the holding period deduction rate from 4% to 2% by 2 percentage points. If the owner actually resides in the property for 10 years, they can receive an 80% deduction, but if they only hold the property without residing, they will receive only a 20% deduction.

Chairman Kim said, "The purpose is to prevent demand from concentrating in specific areas for investment purposes," and added, "The related bill will be proposed by Democratic Party lawmaker O Gi-hyeong."

In addition, the Democratic Party is also pushing for an amendment to the Public Institution Operation Act to align the terms of heads of government-affiliated institutions with that of the president. However, exceptions will be made for political positions with fixed terms such as the Chairperson of the Anti-Corruption and Civil Rights Commission and the Chairperson of the Korea Communications Commission.

Chairman Kim explained, "Recently, there have been ongoing issues about aligning the terms of the president and heads of affiliated institutions, and problems have arisen with the Board of Audit and Inspection being mobilized to request actions." He added, "Regarding this, we amended the Public Institution Operation Act so that when the president’s term ends, the heads of affiliated institutions must undergo a reappointment process." He further explained, "Since it could be harmful if everyone resigns at once, the newly elected government chosen by the people can decide whether to reappoint or replace the heads of affiliated institutions, effectively aligning the terms of the president and the institution heads. The Policy Committee plans to propose legislation accordingly."

However, he noted that positions such as the Prosecutor General, National Police Agency Chief, and Chairperson of the Korea Communications Commission, whose terms are guaranteed by law and who must maintain neutrality, are different in nature and should be treated separately.

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