"Receiving Even One Apartment in Seoul Subject to Inheritance Tax... Democratic Party's Consideration of Easing Welcomed"

The People Power Party expressed a welcoming stance toward the Democratic Party of Korea's consideration of measures to reduce the inheritance tax burden on the middle class, stating, "We hope they approach this with genuine sincerity."

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On the 7th, Jeong Jeom-sik, the Policy Committee Chairman of the People Power Party, said at a floor strategy meeting held at the National Assembly, "It is very encouraging that the Democratic Party, which had opposed inheritance tax reform as a tax cut for the wealthy, has taken a progressive stance."

Chairman Jeong pointed out, "There have been many criticisms that inheritance tax has not kept pace with economic development and inflation rates," adding, "The top tax rate and taxable income brackets have remained unchanged for 24 years, and the inheritance tax deduction amount of 500 million won has stayed the same for 28 years." He continued, "Meanwhile, the amount of inheritance tax paid has increased tenfold over 20 years, and in the past two years, the number of taxpayers with inherited assets between 500 million won and 1 billion won has surged by 50%. Considering that the average price of an apartment in Seoul last month was 1.299 billion won, inheriting just one apartment in Seoul would require paying inheritance tax."

Chairman Jeong stated, "Inheritance tax on businesses is even harsher. Including the surcharge on major shareholders, the top tax rate reaches 60%, which is among the highest in the world," and added, "Given this situation, medium-sized and small businesses are giving up on business succession, and major shareholders are even reluctant to see stock prices rise, fueling the so-called Korea discount." He emphasized, "Inheritance tax not only adversely affects corporate investment and employment but also hinders asset accumulation by so-called Donghak Ants (individual investors)."

He said, "If the Democratic Party truly cares about people's livelihoods and wants to support business growth, inheritance tax reform should not be limited to minor adjustments," and "The entire inheritance tax system must be comprehensively overhauled in line with changing times and global trends." He added, "Inheritance tax should be changed to an inheritance acquisition tax, the major shareholder surcharge should be abolished, and inheritance tax should be adjusted to an appropriate level considering cases in major advanced countries."

On the 4th, Lim Kwang-hyun, the Democratic Party's Deputy Floor Leader, announced, "We will consider amending the inheritance tax law to reasonably adjust the tax burden for middle-class households with taxable income brackets between 500 million won and 1 billion won." Under the current inheritance tax law, a basic deduction of 200 million won per heir is applied, and additional personal deductions for adult children and spouses are added; if the total amount does not exceed 500 million won, a blanket deduction is applied. The Democratic Party intends to raise the blanket deduction amount to around 600 million to 700 million won to reduce the inheritance tax burden.

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