The People Power Party criticized the expiration of the capital gains tax moratorium for multi-home owners on Sunday, saying "Lee Jae-myung-style punitive taxation is pushing Korea's real estate market off a cliff."
"Multi-home owners seeking to sell their homes starting tomorrow will have to bear an effective tax rate of up to 82.5 percent, including local income tax," Park Sung-hoon, chief spokesperson of the People Power Party, said in a commentary on Sunday.
"A 'listing freeze' phenomenon, in which properties disappear from the market due to tax barriers, is already emerging in the market," Park said. "The government is completely blocking the exit by dropping a holding tax bomb on those who keep their homes and a capital gains tax bomb on those who try to sell." He argued, "The government is touting optimism based on statistics showing that the volume of sales by multi-home owners has increased and the proportion of purchases by non-homeowners has risen. But these are merely abnormal distressed sales that owners have reluctantly put on the market to avoid the tax bomb."
"Jeonse prices are setting record highs, and even those are in short supply, pushing ordinary citizens with nowhere to go from jeonse (a Korean lease system requiring a large lump-sum deposit instead of monthly rent) into monthly rent arrangements," Park said. "Is kicking away the housing ladder for ordinary citizens and turning them into 'monthly rent slaves' what President Lee Jae-myung calls 'real estate normalization'?" He added, "If the government continues to try to control the market solely through taxes while ignoring fundamental solutions such as deregulation and the normalization of reconstruction and redevelopment, the public will no longer tolerate its policy failures. The Lee Jae-myung administration must immediately stop the practice of picking the public's pockets while hiding behind the superficial slogan of 'real estate normalization.'"
Meanwhile, the Ministry of Land, Infrastructure and Transport (MOLIT) decided to exempt multi-home owners from the heavy capital gains tax if they submit the relevant documents by 6 p.m. Sunday and complete the transfer procedures by November at the latest. Accordingly, all 25 district offices in Seoul opened and accepted applications despite the day being a holiday.
