President Lee Jae-myung pushed back on the 2nd against criticism from within the ruling bloc that his partial easing of the comprehensive real estate holding tax for owners of a single home who do not live in it showed a lack of policy consistency and a retreat from reform, saying critics should "look at why home prices in Gangnam are plunging."
In a post on X, formerly Twitter, Lee said the government had "restored the threshold to 1.2 billion won and kept the annual cap on increases in the holding tax at the original 150%, reflecting the views of politicians and the public, and yet there is criticism that this lacks consistency or amounts to a retreat from reform." He countered that such criticism "overlooks the changes to the holding tax on high-priced homes that owners do not occupy, the changes for multiple-home owners and ultra-high-priced homes, and above all the narrowing of capital gains tax breaks for non-occupied single homes, ultra-high-priced homes and multiple homes."
The government had earlier scrapped a plan to lower the holding tax exemption ceiling for mid- and low-priced homes not occupied by their owners to 900 million won, deciding instead to keep the current 1.2 billion won. It also withdrew a plan to raise the annual cap on increases in the tax burden to 200% from 150%.
"A 200% cap on holding tax increases is not just, and 150% is not unjust," Lee said. "It is simply a matter of policy choice, where preferences differ." He added: "I hope people will look at the substance of the policy as a whole, not only aggressive hard-line arguments, and also look at why housing prices in areas such as Gangnam are now falling sharply." He went on to ask whether "changing a policy position is unjust and holding to one is unconditionally right," stressing that revising a policy is not a retreat from reform.
Lee also responded to criticism that the 820 trillion won budget for next year, announced by the government the previous day, lacked funding and welfare spending to ease economic polarization, saying "now is the time to concentrate on growth and expand the pie."
Sharing a newspaper editorial that argued next year's budget should strengthen measures to narrow inequality, Lee wrote on X that "'abandoning growth while expanding welfare' is not possible, and 'expanding growth and welfare at the same time' is ideal but unrealistic." He said: "Unfortunately, we are now in a 'growth hardship' created by the previous government, so for the time being we must focus more on growth and recovery."
"That does not mean welfare has been rolled back," Lee said. "If we fail to restore sustained growth and end up with zero or negative growth, polarization will widen further and welfare could even be cut." He added: "It may be hard to be satisfied, but we are also working to expand welfare. There is even criticism that this is an excessively populist welfare budget. Only a year has passed, so I ask for a little more time."
