Koo Yun-cheol, Deputy Prime Minister and Minister of Economy and Finance, reaffirmed his stance that any reform of property holding taxes and other real estate tax policies will be decided after a comprehensive review of policy effects and market conditions. The remarks are widely interpreted as signaling that the government is keeping all options open — including a scenario for raising holding taxes — ahead of its tax reform package scheduled for July.
Appearing on KBS's "Sunday Diagnosis Live" on the 29th, Koo was asked whether real estate tax reform would be included in the July package. "We are listening to public opinion and monitoring the market, but nothing has been decided at this point," he said. "We are at the stage of careful observation."
He particularly emphasized that President Lee Jae-myung has described real estate taxation as "the last policy tool for market stabilization," adding, "If stabilization is not achieved, we will make a judgment at that time." The comment signals that the decision on holding tax reform will be tied to market trends and policy effectiveness.
On the recent property market, Koo said, "Prices are falling in areas that had risen sharply, such as the three Gangnam districts and Yongsan. It is difficult to say the overall market is in a downward stabilization, but it is a good signal." He added, "I hope this leads to a stable atmosphere in other regions as well."
Regarding the won-dollar exchange rate surpassing 1,500 won amid geopolitical risks stemming from the Middle East, Koo said, "Once external shocks stabilize, we expect things to return to normal." He stressed, "Considering our foreign exchange reserves and net external assets, this is not an immediately worrisome situation. It is a manageable level."
On responding to rising oil prices, he said, "We have left room on fuel taxes," adding, "If the situation becomes urgent, we will do our best to help the public adapt through various measures, including further fuel tax cuts."
On current oil price levels, Koo said, "Prices are at $100 to $110 per barrel, and if they move toward $120 to $130, we will make a comprehensive judgment."
Regarding naphtha supply issues, he explained, "The United States has lifted controls on Russian petroleum imports for one month. We are reviewing the issue of importing Russian products and are in partial discussions."
Koo expressed optimism about the World Government Bond Index (WGBI), which Korea is set to begin joining on April 1. "Inclusion in the WGBI will lower government bond yields, and as interest rates fall, companies will increase investment — creating a virtuous cycle," he said. "As dollars flow in, it will also help stabilize the exchange rate, providing a positive impact on the Korean economy."
On restructuring tax expenditures, he said, "In principle, we will abolish chronically maintained tax exemptions and reductions. We will conduct a comprehensive review and reflect the results in the July tax law revision bill to be submitted during the regular session of the National Assembly."
On the first investment project in the United States, he added, "There is a possibility it will be in the energy sector, but nothing has been decided yet. Discussions are ongoing."
