Gangnam, Ultra-Premium Single-Home Owners Hit by 'Tax Bomb'; Oh Se-hoon Fires Back

*Editor's Note: 'AI PRISM' (Personalized Report & Insight Summarizing Media) is an "artificial intelligence (AI)-based customized news recommendation and summary service" developed with support from the Korea Press Foundation. It selects and provides six customized news items by reader type.

1. Oh Se-hoon: "Raising Holding Taxes Is State Violence… Opposes Housing Supply on Yongsan Park Site"

Key Summary: Seoul Mayor Oh Se-hoon directly criticized the government's tax reform stance at the "Citizens' Grand Debate for Normalizing Real Estate" on the 6th. An attendee who has run a brokerage in Jamsil for 21 years testified, "Jeonse and monthly rent listings, which used to come out at 50 to 80 per complex, have recently fallen to fewer than 10." Yoon Ji-hae, head of the Research Lab at Real Estate R114, stressed that only expanding supply is the solution, saying, "If holding taxes are raised while transaction taxes are partially eased, a conflict of interest will arise in which demand concentrates on a 'less-than-perfect single home.'" The Seoul Metropolitan Government plans to compile the opinions from the debate and recommend to the government measures to ease the tax burden on long-term holders, improve private rental supply conditions, and relax regulations on redevelopment projects.

2. Ruling Party's Seoul-Region Lawmakers: "Non-Resident Single-Home Tax Burden Raises Rent Pass-Through Concerns"

Key Summary: The Democratic Party's Seoul branch held a closed-door real estate policy meeting on the 6th, attended by nine National Assembly members from Seoul districts and 27 Seoul city council members. Under the government's plan, the comprehensive real estate tax basic deduction will be applied differentially from next year at 1.4 billion won for residents and 900 million won for non-residents, and the possibility that the resulting tax burden will be passed on through rent increases has emerged as the key issue. Opinions were also raised that the special long-term holding deduction does not sufficiently reflect inflation over the holding period. The Presidential Office said that day, "This tax reform is not a short-term response for stabilizing the real estate market," and pledged to swiftly present comprehensive policy including housing supply measures.

3. Lee Hyoung-il, Vice Minister of Economy and Finance: "Preparing to Further Expand Owner-Occupancy Grace Period… Hard to Sell Due to Land Transaction Permit System"

Key Summary: Lee Hyoung-il, First Vice Minister of Economy and Finance, said on the 6th that the government is preparing a plan to further expand the grace period on buyers' owner-occupancy obligations to facilitate transactions of homes occupied by tenants within land transaction permit zones. Currently, when someone who owns no home purchases a house within a permit zone under a lease contract signed after May 12, owner-occupancy is deferred until the first termination date of the lease, with a land transaction permit application required by the end of this year. Vice Minister Lee explained the background of the supplement, saying, "There are voices saying that even when people try to sell their homes due to the holding tax burden, it is difficult to find an owner-occupant because they are tied up by the land transaction permit system." The specific method of expansion and timing of implementation have not yet been disclosed.

4. Seoul Apartment Auction Winning-Bid Ratio Tops 100% for Fourth Consecutive Month

Key Summary: According to the July auction trend report released by GG Auction, Seoul apartment winning-bid ratios recorded 101.0%, exceeding appraised value for four consecutive months. The number of Seoul apartment auctions proceeded reached 180, up 20% from the previous month (150), and the winning rate rose 4.3 percentage points from the previous month to 38.3%. The analysis is that high winning bids are continuing centered on complexes with reconstruction and remodeling expectations in the segment appraised at 1.5 billion won or less. Manan-gu in Anyang, Gyeonggi Province, a non-regulated area, recorded a winning-bid ratio of 124.4%, and Gunpo 112.9%, showing a clear temperature difference by region within the greater Seoul area.

5. Gaepo Woosung, Guro Jugong and More… 9,237 Units to Be Supplied Across 5 Sites in Seoul

Key Summary: The Seoul Metropolitan Government held the 9th Urban Planning Committee Delegated Subcommittee and conditionally approved revised maintenance plans for five zones, including Gaepo Woosung 1 & 2 in Daechi-dong, Gangnam-gu, and Guro Jugong in Guro-dong, Guro-gu, laying the foundation for supplying 9,237 units. Gaepo Woosung 1 & 2 will be reconstructed into 1,603 units up to 49 stories, with 258 public units to be supplied as long-term jeonse housing. Guro Jugong, which had been held back by its semi-industrial zone designation, will be reborn as a 3,289-unit complex as the Seoul Metropolitan Government eases the floor area ratio from 250% to 400%. The 32 sites currently pursuing redevelopment projects within semi-industrial zones total 27,175 units, drawing the assessment that the shifting trend in supply conditions warrants attention.

6. Amid Lending Restrictions, Even Mid-Credit Borrowers Pushed Toward Moneylenders

Key Summary: According to loan comparison platform Finda, the number of contracts for products registered with reputable moneylenders surged 32.6% from 1,376 in January this year to 1,825 last month. Among these, the growth rate in contracts by mid-credit borrowers with credit scores in the 700s was 38.0%, exceeding the overall average. The number of bank credit loan limit inquiries shrank 46.6% from 1,160,897 in June to 620,249 in July. According to the Korea Inclusive Finance Institute, an estimated maximum of 119,000 low-credit borrowers moved to illegal private lending last year after being rejected for loans from registered moneylenders.