Mayor Oh Se-hoon: "Abolishing the Special Long-Term Holding Deduction Violates Property Rights"

Seoul Mayor Oh Se-hoon has openly criticized President Lee Jae-myung's plan to abolish the special long-term holding deduction (Jangteukgong) for single-homeowners.

On the 20th, Seoul Mayor Oh Se-hoon visited the first Goodwill Store to inspect the site. Through Facebook that day, Mayor Oh directly criticized President Lee Jae-myung's plan to abolish the special deduction for long-term ownership of non-resident single-homeowners. Provided by Seoul City

원본보기 아이콘

On April 20, in a Facebook post titled "After wrecking the market with regulations, is the answer another tax bomb?", Mayor Oh argued, "People who have owned and lived in their homes for a long time have nothing to do with short-term speculative gains," adding, "Abolishing the special long-term holding deduction is a clear violation of the people's property rights."

Mayor Oh also stated, "In about 10 years, the prices of most goods and services generally rise," and added, "If you tax the capital gains just because home prices have gone up over time, it is essentially depriving people of their constitutional freedom to move residence."

He further insisted that abolishing the deduction would "only lead to the unintended consequence of supply drying up." He explained that this is why countries such as the UK, France, Germany, and Australia do not tax capital gains on the sale of a single long-term residential property.

Mayor Oh said, "The biggest victims of the abolition of the special deduction will be the citizens of Seoul," and pointed out that "with the average apartment price in Seoul now exceeding 1.5 billion won, those who bought their homes long ago will be faced with an enormous tax burden if they try to sell."

Mayor Oh also called on Jeong Won-oh, the Democratic Party's candidate for Seoul mayor, to clarify his position on the abolition of the deduction, asking, "Will you turn a blind eye to the enormous damage to citizens and remain silent in the face of a government bent on excessive taxation?"

Previously, on April 18, President Lee stated via social media platform X (formerly Twitter), "The special long-term holding deduction on capital gains tax is a system that drastically reduces the tax solely for long-term ownership, regardless of whether the owner actually lives in the property," and added, "It is against justice and common sense to sharply reduce taxes on real estate speculative windfall gains just because the property was held for a long time, even if the unearned profit is tens or hundreds of billions of won, regardless of whether it was used as a residence."

President Lee went on to propose, "If we abolish the deduction but first provide a six-month implementation grace period, then for the following six months only abolish half, and after one year fully abolish it, this approach would encourage homeowners to sell quickly, increasing supply rather than reducing it." He further stated, "If we make it clear in law that the deduction cannot be reinstated, then even if there is a change of administration, the president will not be able to change the law at will, making it meaningless to try to wait it out."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.