Koo Yoon Cheol: "Real Estate Tax Reform to Be Announced by End of Month... Balance Needed Between Property Holding and Transaction Taxes"

Deputy Prime Minister and Minister of Economy and Finance Koo Yoon Cheol announced that the government is preparing to announce a real estate tax reform, which includes revisions to property holding and transaction taxes, by the end of this month.

On July 7, appearing on the program "Kim Jongbae’s Focus," Deputy Prime Minister Koo stated, "The two aspects need to be balanced," and added, "Based on the principle that a house is for living rather than buying, we are aiming to establish a housing market centered on actual residents. The government will not make a unilateral decision but will soon gather public opinions and voices from the field before finalizing the policy."

When asked about various reports on the direction of real estate tax reform, such as adjusting the fair market value ratio and reducing long-term ownership special deductions for non-residents, he avoided a direct answer, saying, "Since those are also opinions from the public, we will consider them."

Regarding tax support measures for the government’s "Three Major Mega Projects," he said, "We are reviewing tax support measures such as income tax deductions for workers employed in regional areas."

He further explained, "For those working in the provinces, greater income tax reductions will be provided compared to living in Seoul, and depending on the case, support for children’s education expenses may also be considered." He added that the methods, such as income or tax credits, will be decided by considering the preferences of regional workers.

Regarding plans for corporate tax support, he mentioned, "We plan to support R&D and investment, and even if taxes are paid now, if there is a time when they are unable to pay taxes in the future, we are considering allowing carryforwards of tax credits."

On the size of corporate tax revenue resulting from the semiconductor boom, he said, "It is reported that hundreds of trillions of won in operating profits are being made, but we have not yet compiled the exact corporate operating profit figures." He added, "It will only be possible to make predictions after receiving the first-half business results and the August corporate tax prepayment."

Specifically for semiconductor companies, he explained, "According to this year’s operating profit outlook from FnGuide, just Samsung Electronics and SK hynix are expected to record a combined operating profit of 600 trillion won, and even taking only 20% of that as average, it amounts to an enormous sum," adding, "These two companies are essentially paying the majority of the corporate tax."

Regarding the idea of establishing a "Future Response Fund" based on excess semiconductor tax revenues, he explained, "We are internally discussing using it for future projects that are essential for the Republic of Korea and cannot be replaced."

When asked whether a significant portion of the fund would be used for additional power and water supply required by the semiconductor industry, he answered, "There are many other innovative industries besides semiconductors. R&D and infrastructure support are also needed for areas such as robotics, physical AI, shipbuilding, and aviation," and gave examples such as AI education and startup support for young people.

Regarding the specific timing for releasing the blueprint, he said, "The Ministry of Planning and Budget is currently preparing it," and emphasized, "There is a need for speed, so if possible, the relevant bill should be submitted before the regular National Assembly session in September."

Concerning the budget proposal for next year, he explained, "We will provide extensive support to address issues such as AI support, polarization, livelihood, and structural innovation so that our society can move forward as a leading nation," adding, "Since tax revenues are good, we will determine the fiscal scale based on revenue conditions."

This content was produced with the assistance of AI translation services.