Lee Hyung-il, the nominee for deputy prime minister and finance minister, said there are aspects that make it "difficult to conclude that demand is speculative based solely on the fact that the owner did not live in the home." He limited the remark to homes in redevelopment or rebuilding districts, where demolition and loss of the structure are unavoidable. Still, the comment drew attention because it came after the government restored the basic comprehensive real estate tax deduction for owners of a single home who do not live in it to 1.2 billion won from the 900 million won initially proposed. Some read it as leaving open the possibility of further easing for such owners when the National Assembly reviews tax legislation.
Lee made the comment in written answers submitted to the National Assembly on the 13th for his confirmation hearing, responding to a question on whether holding a home slated for rebuilding without living in it for a long period can be viewed as speculative demand. Lee himself is a single-home owner who does not live in his property. He bought an apartment in Gwacheon in 2009 and held it for more than 17 years, though the building was demolished for rebuilding and he lived there for about four months.
Lee repeated his position that not all non-occupied homes amount to speculation. "We do not regard every non-occupied home as held for speculative purposes," he said. "We sought to protect single homes used as residences as much as possible, while normalizing taxation on homes the owner does not live in." He added that exceptions will be recognized for cases where non-occupancy is unavoidable, and that additional grounds for such exceptions will be "reviewed flexibly" when the presidential decree is amended.
The key question in any further easing is how far the tax burden on single-home owners who do not live in their properties will be lowered. Even if the government keeps the principle of differentiating between occupied and non-occupied homes, options under discussion include broadening the grounds counted as unavoidable non-occupancy and keeping the fair market value ratio for single-home owners at the current 60%. Observers say the government could also consider raising the combined basic deduction for married couples who jointly own a single home they do not live in to 1.8 billion won, and delaying an overhaul of the long-term holding deduction for capital gains tax now scheduled for 2029. Raising the deduction cap for non-occupant single-home owners to 1.4 billion won, the same level as for owner-occupiers, is understood to have become less likely.
