[Inside Chodong] The Implications of "Lee Jae-myung Gets Things Done"

Endless Debate Over Real Estate Policy
A Robust System Matters More Than Political Victory

The pledge to postpone the imposition of heavier capital gains taxes on owners of multiple homes was a campaign promise made by then-presidential candidate Yoon Suk-yeol in the 2022 presidential election. He was the first among real estate policymakers to take action, vowing to reverse what he saw as excessive taxation during the Moon Jae-in administration. With housing prices in Seoul soaring and anxiety over housing reaching its peak, even the then-ruling Democratic Party found itself on the defensive.

Lee Jaemyung, the Democratic Party's candidate in the same election, also made a conditional pledge to temporarily suspend the heavier capital gains tax at that time. This is why, earlier this year, when civil servants were unsure of their stance, it felt somewhat unusual for President Lee to come forward and declare unequivocally, "There will be no suspension of the higher tax rates."

Yoon Suk-yeol's campaign team moved to fulfill the promise even before he took office. Choi Sangmok, then secretary of the First Economic Subcommittee of the Presidential Transition Committee, announced, "We have decided to work towards temporarily suspending, for one year starting in April, the heavier capital gains tax rates for multiple homeowners." While the official language was one of effort, it was in effect a polite ultimatum to the outgoing administration. Less than a month after the election, they requested a revision of the Enforcement Decree of the Income Tax Act.

Although the request was formally presented, it was effectively backed by the authority of the president-elect, treating the outgoing administration as a lame duck. The Moon administration refused. Then, in May, with the inauguration of the Yoon administration on May 10, the revision was made. Over the next four years, the rule was renewed yearly. This is why the reinstatement of the system falls on May 10.

President Lee often posts messages about real estate policy on social media, habitually using expressions like "Lee Jaemyung gets it done" or "The people's sovereignty government gets it done." This self-confidence stems from his administrative experience built from the grassroots level as a local government head, his meticulous work style, and his bold temperament. It stands in clear contrast to former presidents who left office in disgrace for breaking the law. It also serves as fuel to rally his supporters and gain momentum for policy implementation.

Regardless of how one interprets the intent of this policy, there is an undeniable awkwardness in the president being the one to take such direct action. While it certainly brings momentum, it inevitably turns the matter into a highly political act. "Lee Jaemyung gets it done" implies that the next president, too, could use political support as a shield and flip policies at will. Wasn’t that exactly what happened just four years ago?

Under the Yoon administration, with the opposition holding a majority in the National Assembly, the government could not change the law as intended, so it amended the Enforcement Decree every year. This is a familiar scene. When determining the officially assessed values of houses and land—which serve as the tax base—the rate at which market prices are reflected and the fair market value ratio were set arbitrarily by each administration without clear standards. This made real estate policy a battleground for political power. Flexibly applying the system according to political support is not something to be celebrated. When the system lacks authority, endless and unproductive debates erupt. Not knowing when or how things will change, speculative capital is always lurking nearby, waiting for a windfall.

There have been attempts to strengthen the system. There was a plan to gradually raise the market price reflection rate, and even a constitutional challenge claimed that officially assessed values and the fair market value ratio violated the principle of statutory taxation. Both efforts came to nothing. In my view, the object of the phrase "Lee Jaemyung gets it done" should go beyond simply collecting more taxes or lowering home prices. It should mean establishing a robust system that does not sway with political winds or changes in administration.

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