Are You a Speculator if You Live in a Jeonse Rental While Owning a Home?... Heated Debate at Real Estate Forum on the 16th

Government to Hold Forums on Housing Supply, Finance, and Taxation from July 14 to 16

Yonhap News

The government will hold a real estate policy forum over three days until July 16, where major issues such as housing supply, finance, and taxation will be discussed. The key opinions raised during the forum will be comprehensively reviewed at a large-scale presidential debate scheduled for July 23.

On July 14, the Ministry of Economy and Finance announced that, as part of efforts to gather public feedback, it will host forums dedicated to housing supply, finance, and real estate tax policy over the next three days. On the first day, the Ministry of Land, Infrastructure and Transport will hold a forum focused on housing supply, followed by the Financial Services Commission’s forum on financial regulations on July 15. The Ministry of Economy and Finance will then lead a discussion on real estate taxation on July 16.

Each forum will be attended by the relevant ministers, with subject matter experts presenting on the policy landscape and main issues, followed by participant discussions. All sessions will be broadcast live.

At the housing supply forum, discussions will include deregulation measures to revitalize private redevelopment and reconstruction projects. The use of idle urban lands such as the Yongsan International Business District and the easing of financial and taxation regulations for multi-homeowners to encourage the construction of non-apartment housing will also be on the table.

Other agenda items include ways to ease demand in the Seoul metropolitan area by relocating public agencies to regional areas, as well as the designation of regulated areas such as speculative zones.

At the Financial Services Commission’s forum on July 15, the need to ease lending regulations and expand policy loans for genuine homebuyers, including young adults, will be central topics. The review of current regulations on jeonse loan guarantee ratios and relocation loans is also expected to be a key issue. Currently, relocation loans are subject to the same loan-to-value (LTV) ratio of 40% as mortgage loans.

Real estate taxation will be discussed on the last day, July 16. The forum will cover a wide range of topics, from fundamental questions—such as whether the goal of tax reform is to stabilize the sales and rental markets—to more concrete discussions about the appropriate levels of comprehensive real estate tax (also known as “comprehensive property tax”) and property holding taxes, both of which have been highlighted as likely targets for reform.

Forum participants will also debate whether to differentiate tax burdens based on location—metropolitan areas, non-metropolitan areas, regulated areas, and non-regulated areas—or whether such differentiation amounts to excessive discrimination.

When it comes to property holding taxes such as property tax and comprehensive real estate tax, major points of debate are expected to include international comparisons of tax burdens between Korea and advanced countries, as well as how higher taxes could affect tenants.

Changes to the special long-term ownership deduction will also be on the agenda. Discussions will focus on whether to further reduce benefits for non-residents, after already restricting them for multi-homeowners, or to maintain the status quo. Other issues up for discussion include whether living in a jeonse rental while owning a home—such as moving in with children for grandchild care—should be considered speculation, and whether benefit reductions are necessary for ultra-high-priced housing.

A presidential debate to be held on July 23 will comprehensively discuss the major opinions that emerged from these national forums. An online platform for public feedback will also be open from July 14.

An official from the Ministry of Economy and Finance stated, “Based on opinions received through both preliminary offline and online channels, we will continue with further questions and discussions, while also reviewing future policy directions and areas for improvement. The government will take this opportunity to expand public participation in the real estate policy-making process, and will actively review the collected opinions for potential improvements to the system.”

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