The Presidential Office said it is reviewing measures to create an "exit route" that would encourage multi-home owners to put properties on the market, alongside strengthening property holding taxes as part of real estate tax reform. Measures to ease the tax burden on retirees relocating to provincial areas are also under discussion. The government is expected to unveil its tax reform plan late this month or early next month after gathering final opinions through a second national public forum.
Kim Yong-beom, head of the Presidential Office's policy planning, said on CBS Radio's "Park Sung-tae's News Show" on the 27th, "Various constructive opinions came out (at the real estate forum), and we are considering ways to appropriately reflect them in policy." Earlier, President Lee Jae-myung held a national public forum on real estate policy on the 23rd to hear diverse views on real estate supply, financing and taxation.
On specific issues, Kim said, "There were diverse opinions on how to strengthen property holding taxes and what the threshold for ultra-high-price homes should be," adding, "We are also gathering opinions on the ultra-high-price home threshold in our own way." He particularly noted, "On the capital gains tax, various constructive opinions emerged, including a plan to set a cap on the special long-term holding deduction, a plan to open an exit route so that multi-home owners can put properties on the market even if holding taxes are strengthened, and a plan to ease the tax burden on those relocating to provincial areas after retirement."
On the same day, Ha Joon-kyung, the Presidential Office's senior secretary for economic growth, said on SBS Radio's "Kim Tae-hyun's Political Show" regarding holding taxes, "It is desirable to collect them at a socially appropriate level, but they must not harm housing welfare," adding, "We plan to make decisions by considering housing welfare, social efficiency and tax fairness together."
To criticism that the real estate measures lacked rental market measures, he said, "They will be announced soon." He said, "To rein in monthly rents, sufficient supply must be provided," adding, "We are preparing measures that can supply quickly in the short term." Regarding jeonse (a Korean lease system requiring a large lump-sum deposit instead of monthly rent) prices, he explained, "Costs have risen partly due to trust issues such as jeonse fraud," adding, "We are also preparing measures for this."
The government is expected to announce its tax reform plan late this month or early August after conducting a final review of detailed measures through the second national public forum on real estate policy, held that day at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, and chaired by Prime Minister Han Seong-sook. In her opening remarks, Han stressed, "According to last year's national balance sheet, real estate accounts for 71.9% of household net assets," and, "Interests are more complex and consensus harder to find than in any other area, but this is a task that must be resolved."
The forum was attended by about 120 people in total, including Koo Yun-cheol, deputy prime minister and minister of economy and finance; Kim Yun-duk, minister of land, infrastructure and transport; and Lee Eok-won, chairman of the Financial Services Commission, as well as about 20 academics and experts, about 40 ordinary citizens including university students and newlyweds, about 10 influencers and licensed real estate agents, and about 20 officials from related institutions such as the Financial Supervisory Service, the Korea Real Estate Board and the Korea Land and Housing Corporation (LH). Following the first forum, this session discussed in greater detail the ultra-high-price home threshold for differentiated application of holding taxes and measures to boost non-apartment supply to expand overall supply.
Minister Kim said, "We are preparing specific measures to boost non-apartment supply," adding, "We are continuing to consult with the Financial Services Commission so that supply can be activated and the players in corporate rental housing can be diversified, and a conclusion will be reached soon."
He continued, "After becoming minister of land, infrastructure and transport, I developed a strong desire to build homes even if it means lifting greenbelt restrictions," adding, "We are actively considering releasing part of it to supply housing." He also said, "Procedures that had proceeded step by step, such as one-stop use conversion services, permits and financing, will from now on be pursued in parallel," announcing a policy to accelerate the pace of supply.
Meanwhile, the Democratic Party will hold a closed-door party-government meeting at the National Assembly at 8 a.m. on the 30th to discuss the second-half tax reform plan. The biggest point of contention is the real estate tax reform plan. The government is currently strongly reviewing a plan to switch the comprehensive real estate tax assessment basis from the number of homes owned to the combined value of housing assets, and to differentiate the tax burden on single-home owners to calculate appropriate holding taxes. The ultra-high-price home threshold, the gradual strengthening of holding taxes and measures to ease transaction taxes are also expected to be discussed in detail between the party and the government.
From the National Assembly, lawmakers belonging to the Democratic Party's Policy Committee and the Finance, Economy and Planning Committee will attend, while from the government side, officials including Deputy Prime Minister Koo will participate. A Democratic Party lawmaker on the National Assembly's Political Affairs Committee said, "We plan to hold in-depth discussions with the government on real estate policy."
