Democratic Party Denies Reviewing Tax Reform Amid Special Deduction Abolition Controversy: "Malicious Framing"

The Democratic Party of Korea has stated its official stance that it has "never considered any revision related to the tax system" regarding the abolition of the long-term holding special deduction (hereinafter referred to as the special deduction) for capital gains tax on owners of a single home.

Junhyun Kang, Senior Spokesperson of the Democratic Party of Korea, met with reporters at the National Assembly on April 20 and said, "There should be no tax burden for those who legitimately own a home. How could we abolish it entirely?" He continued, "We see this as a malicious framing and believe that the People Power Party is engaging in agitational politics ahead of the local elections."

The special deduction is a system under the Income Tax Act that allows for a partial deduction from capital gains when selling real estate, such as an apartment, that has been owned for more than three years and occupied for more than two years. Previously, Yoon Jongoh, a lawmaker from the Progressive Party, along with other lawmakers from the ruling bloc, proposed an amendment to the Income Tax Act that would limit the amount of tax relief.

Junhyun Kang, Senior Spokesperson of the Democratic Party of Korea. Photo by Yonhap News

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Regarding President Jaemyung Lee's mention of the special deduction on social media, Kang explained, "The context needs to be considered." He added, "The context is that we are closely monitoring issues where homes are purchased for speculative purposes under real estate policies. For example, if a single homeowner temporarily moves and rents a home due to their child's schooling or work, this period should not be extended to 10 or 20 years."

He further stated, "In the case of abolishing the temporary suspension of heavy capital gains tax on multiple homeowners, it is currently regulated by an enforcement ordinance, which means it changes with every change in administration." He continued, "The intention was to express that it would be better if this matter were elevated to the level of law."

In addition, regarding President Lee's request for the National Assembly to begin the process of appointing a special inspector, Kang said, "We will actively discuss the matter." He added, "In the past, there have been cases where one candidate was recommended by the ruling party, one by the opposition party, and one by the Korean Bar Association. Including this, the floor leadership will fully discuss the matter with the opposition party."

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