The Democratic Party of Korea has dismissed controversy over the potential repeal of the long-term holding special deduction on real estate capital gains tax, saying it has "not reviewed the matter at all."
Kang Jun-hyun, chief spokesperson for the Democratic Party, addressed on Wednesday the People Power Party's criticism that used the term "repeal of the long-term holding special deduction." "The bill in question was introduced by 10 lawmakers including Rep. Yoon Jong-oh of the Progressive Party, and our party has not reviewed any tax system reform at all," Kang said.
The long-term holding special deduction is a system that provides a certain level of capital gains tax deduction to those who have held real estate for an extended period. President Lee Jae-myung directly refuted on his X account (formerly Twitter) on the 18th the People Power Party's claim that abolishing the deduction would bring a "tax bomb."
"The long-term holding special deduction is a system that significantly reduces capital gains tax solely on the grounds of long-term ownership, regardless of whether the owner actually resides there," Lee said at the time. "People should not be deceived by such lies aimed at rationalizing wrongful self-serving arguments that hide improper purposes." He added, "If we codify in law that the deduction cannot be revived, even a change of administration would not allow a president to change it at will, making resistance meaningless." Lee also expressed his intention to pursue a legal amendment rather than a change in enforcement decree.
Regarding this, Kang said, "The context of what President Lee wrote on X must be understood." He explained, "First, the moratorium on heavy capital gains tax is being abolished, and this is stipulated in the enforcement decree. Since this keeps changing through the enforcement decree depending on the administration, he expressed his intention to elevate it to law." Kang continued, "The president spoke in the context of whether there is a speculative purpose. President Lee's view is that he is carefully examining the issue of purchasing homes for speculative purposes in relation to real estate policy."
"The People Power Party is now applying a malicious frame, and it is a lie," Kang said. "How could it be completely abolished when there are actual residents?" He added, "Those who hold property legitimately should not bear a tax burden. We view this as a malicious frame, and the People Power Party is engaging in agitation politics ahead of the local elections."
