Democratic Party leader Kim Min-seok said on the 23rd that the government should broadly recognize the "varied and unavoidable reasons" why owners of a single home may not live in it. Speaking at the first high-level party-government meeting since he was elected party chief, Kim put the brakes on the government's planned overhaul of property taxes. The government is pushing measures that include lowering the basic comprehensive real estate tax deduction for single-home owners who do not live in their property from 1.2 billion won to 900 million won. In response, the Democratic Party strongly urged the government not to distinguish between resident and non-resident owners for those who own just one home. To boost housing supply, the party and government agreed to transfer permitting authority for redevelopment and rebuilding projects of 500 units or fewer in Seoul to the heads of district governments, and to discuss easing regulations on private redevelopment projects. It is a positive step, if belated, that the government has finally moved to rein in property policies that had drifted from public sentiment.
Yet with concerns about side effects mounting even before the tax overhaul takes effect, the response must not stop at patchwork fixes that carve out a few exceptions. The government should reexamine its property policy as a whole from the ground up — not only the punitive taxation of non-resident single-home owners and ultra-high-priced homes, but also lending restrictions. Sharply raising the tax burden using non-residency as a blanket standard could push those costs onto rents, worsening instability in the jeonse and monthly-rent markets instead. That is why Kim, while agreeing with the intent of reshaping the long-term holding tax deduction around actual residence, called for careful attention to the ripple effects on the rental market. Financial support must likewise be designed with precision so that funds flow toward helping owner-occupier buyers purchase their first home and toward housing supply. Repeatedly loosening and tightening loans without consistent principles only heightens market uncertainty. The transfer of redevelopment and rebuilding permitting authority also requires prior consultation and coordination mechanisms so that projects are not instead delayed by discord between the Seoul metropolitan government and district governments.
This high-level party-government meeting was the first test of how the ruling party would voice its views on government policy since Kim took office. Its move to point out the flaws in tax and supply policies and to work on improving them is worthy of note. What matters is not hesitating to fix policies expected to produce side effects. The party and government must refine their supply, tax and financial policies as a whole to align with market principles, including measures to supply housing to young adults and newlyweds and to stabilize the jeonse and monthly-rent markets. Consultation with the opposition during the National Assembly's legislative process is also essential. At the meeting scheduled for the 24th between Kim and People Power Party leader Jang Dong-hyeok, the two should open the way for meaningful cooperation on livelihood issues such as property policy and next year's budget.
