The Democratic Party of Korea said Wednesday that neither the party nor the government has discussed scrapping the long-term holding special deduction, a tax break that became controversial after President Lee Jae-myung mentioned its potential abolition. The party, however, left open the possibility of reforming the system, saying excessive benefits for non-resident homeowners should not be permitted.
Speaking to reporters after a high-level party-government meeting on Oct. 22, Democratic Party spokesperson Kang Jun-hyun said, "The People Power Party is making unreasonable claims regarding the long-term holding deduction. There has been no specific discussion at the party-government level on real estate tax reform. The party and government are listening to various opinions from the public." The spokesperson added that the People Power Party is misleading the public as if the long-term holding deduction for owner-occupied single-home owners is also being abolished, when no such discussion has taken place.
Kang nonetheless left room for reform of the deduction system. "The party's direction is based on the principle that the stigma of ruinous real estate-centric thinking must end," he said. "The party's position is that excessive benefits through multi-home rental businesses or ownership of non-resident homes should not be allowed." This suggests that once reform discussions begin, excluding not only multi-home owners but also non-resident single-home owners from the long-term holding deduction could be considered. A Democratic Party official explained, however, that "even for non-resident single-home owners, the party's position is that benefits should be maintained if the ownership is not speculative."
Meanwhile, the Democratic Party, the government and the presidential office held a high-level party-government meeting at the prime minister's residence in Samcheong-dong, Seoul, on Oct. 22, deciding to launch an insurance product next month that will offer premium discounts to vehicles participating in the five-day rotation system implemented to save energy amid the Middle East crisis.
"The non-life insurance industry will launch a five-day rotation rider product next month that discounts auto insurance premiums for participants, providing benefits to citizens who voluntarily join energy-saving efforts," Kang said.
He added, "We plan to expand public participation in energy conservation by preparing measures to ease public transportation congestion within this month," and "we will also prepare green consumption promotion measures, including boosting tourism during the May holiday period."
The government also decided to actively support crude oil imports through Saudi Arabia's Yanbu port and to swiftly execute the 670 billion won naphtha import price differential support program reflected in the supplementary budget. In addition, a measure allowing responsible public officials to apply for livelihood benefits on their own authority in urgent cases requiring support for households in crisis will be implemented within this month.
