The South Korean government and ruling party have never considered abolishing the long-term holding special deduction for single-home owners, Democratic Party Policy Committee Chairwoman Han Jeoung-ae said Tuesday.
"The People Power Party is making false attacks claiming that abolishing the long-term holding deduction would impose a tax bomb on citizens who own one home for actual residence," Han said at a party leadership meeting held at the National Assembly in Yeouido, Seoul.
The long-term holding special deduction is a system that provides up to an 80% reduction in capital gains tax for people who have held a single home for 10 years or more, based on their holding and residence periods. On Saturday, President Lee Jae-myung emphasized the need to reform the system, writing on his X (formerly Twitter) account: "This is tax that should naturally be paid on money earned from rising prices of homes bought to make money without any intention of residing in them. Why should it be significantly reduced just because the property was held for a long time?"
"The government and ruling party have not conducted any discussions regarding the abolition of the long-term holding deduction," Han said. "The president's post also does not call for abolishing the long-term holding deduction, but rather raises the question of whether it is reasonable to provide speculators—who hold expensive homes long-term for speculative purposes without any intention of residing in them—with the same benefits as actual residents."
She added, "Despite repeatedly stating that benefits should be maintained for actual residents or single-home owners who unavoidably do not reside in their property, the opposition's argument framing this as an abolition of the long-term holding deduction is merely a political offensive misleading the public through a malicious frame." She said, "It is time for the opposition to stop political attacks and discuss how to resolve the problems caused by speculation in high-priced homes."
Regarding the Special Act on Creating Busan as a Global Hub City, Han announced plans to "supplement and re-propose" the legislation. "Busan is being systematically restructured within a single national strategy of completing Busan as a maritime capital, rather than through individual bills," Han said. "Amid these changes, the Busan Global Special Act must be redesigned to supplement necessary areas and further strengthen its functions."
"We will comprehensively supplement and reorganize the act to align with the Lee Jae-myung administration's maritime capital Busan strategy," she said. "Rather than handling it hastily, we will actively discuss with the government to prepare practical measures for Busan's great leap forward."
