President Lee Jae-myung signaled that he will proceed as planned with additional regulatory measures, including higher property holding taxes, when the government unveils its tax overhaul in July. While the possibility of the government softening its real estate policy stance had been raised following its defeat in the Seoul mayoral election, Lee effectively dismissed that prospect. He also pushed back on the analysis that the government lost the Seoul mayoral election because of its real estate policy, saying that "positive assessments of the government's real estate policy reach 50 percent."
At a press conference Monday marking the first anniversary of his inauguration, Lee said the tax overhaul, which centers on raising property holding taxes and had been foreshadowed for after the local elections, will be announced in July.
Lee first emphasized that Korea's current property holding tax rate is low. "Because holding taxes are low, there is no burden to accumulating real estate in our country," he said, claiming that "(since holding taxes are low) even a single boulder on a mountain costs just tens of thousands of won." He continued, "We need to increase the burden on homes held for speculative purposes," and pointed out that "speculating in real estate with other people's money does not help the national economy. There is no country with as much real estate-collateralized lending as ours."
Lee explained that he would also announce comprehensive real estate measures, including the holding tax increase, together. "I plan to organize taxes, finance, regulations and supply, and announce them all at once soon," he said. "The tax issue will probably only be possible by July. It will have to be done all together when next year's budget is prepared."
This is interpreted as meaning the government will announce measures such as the holding tax increase in line with the timing when it submits next year's tax law revision and budget bill to the National Assembly.
This is read as a determination to rein in housing prices through stronger regulation without changing the policy stance. "There is nothing that will change about the national policy direction," Lee said. "My thinking is that we need to work a little harder. Rather than considering political factors and the like, I thought I should do the maximum that can be done with the authority granted to me."
Lee also said he would additionally announce supply measures through the expansion of improvement projects such as reconstruction. "(Under the Yoon Suk-yeol government) supply volume sharply decreased," he said. "We are now preparing measures to increase supply as well. Whether reconstruction, redevelopment or land development, we will organize it as quickly as possible and announce it soon."
He also actively rebutted the analysis that real estate policy affected the Seoul mayoral election. "Real estate was already a major agenda item and a constant in the election," he said. "Real estate policy probably had more positive effects than negative ones in the election." He continued, "If I had not pressed down on housing prices through so-called verbal intervention from January, prices would have surged massively," and asked rhetorically, "Would people in areas where prices surged vote for the Democratic Party?"
Lee also rebutted the assessment that the jeonse (a Korean lease system requiring a large lump-sum deposit instead of monthly rent) shortage worked as a negative factor for the ruling bloc in the Seoul mayoral election. "The decline in jeonse supply came because, once I ended the moratorium on heavier capital gains taxes for multi-home owners, the properties that had been rented out disappeared, reducing the volume," he said. "Jeonse prices rising as supply declines is part of a normalization process."
