Opposition: "Lee Administration Obsessed with Real Estate Tax Hikes... Loan Regulation Normalization and Increased Supply Needed"

"Taxes Alone Cannot Control Housing Prices... We've Already Learned This Lesson"

The government’s recently announced plan to overhaul real estate taxation is drawing a series of concerns both inside and outside the National Assembly. The opposition parties have criticized the government for implementing “predatory taxation” to boost state coffers rather than addressing underlying issues in the real estate market, calling instead for deregulation of lending and a shift to a supply-oriented policy.

A real estate agency in Gangnam-gu, Seoul on the 31st of last month. Photo by Yonhap News Agency

On August 4, Song Eon-seok, a member of the People Power Party, stated on his social media, “This tax reform plan is likely to only exacerbate listing lockup, transaction slowdown, and real estate polarization, rather than expanding supply or stabilizing the market. Attempts to control the market through taxation will simply lead to further distortions.”

Song expressed concern that “In the short term, relaxing the heavy capital gains tax may temporarily bring more listings to the market, but once the temporary measure expires, transactions could slow again and listings for prime properties may become further locked up.” He further noted, “The increased ownership tax burden for multi-homeowners will ultimately be passed on to tenants in the form of higher rents.”

Song demanded alternatives, stating, “Instead of being fixated on tax hikes, President Lee Jae-myung and the government should normalize loan regulations and expand the supply of housing, so that ordinary citizens can finally achieve their dream of home ownership in the real estate market.” He added, “That is what real estate policy for the people should look like.”

People Power Party Secretary General Jeong Hee-yong wrote on his social media the same day, “We already experienced during the Moon Jae-in administration that taxation alone cannot stabilize housing prices. Why are you ignoring the warnings of experts and the pleas of the public that raising the ownership tax and adjusting the capital gains tax, without increasing supply, will not control prices?”

He added, “What’s more, this reform plan even targets tax benefits essential for ordinary people and young generations, such as deductions for marriage and childbirth, tax credits for electric vehicles, and additional mass transit exemptions. This is essentially stripping away even the minimal tax safety net for our people and future generations.”

People Power Party lawmaker Cho Jung-hoon pointed out on social media, “If you reduce the long-term ownership special tax deduction, people will lose assets every time they move. This makes it harder to move to a larger house as your family grows, or to relocate for work or school.” He further challenged, “Are you saying we should stop moving altogether?”

Cho criticized, “The real estate tax reform package announced yesterday is supposed to normalize the tax burden, but ultimately it’s just predatory taxation.” He stated, “The responsibility for failing to control housing prices, and for not supplying homes in a timely manner, both lie with the government. Real estate policy should be about increasing housing for the people, not government revenue.”

Seoul Mayor Oh Se-hoon also commented via social media, “The core of this new package appears to be the long-term ownership special deduction. Ultimately, the government is sending a signal to the market that if you do not live in your home, you will pay a higher capital gains tax.” Mayor Oh warned that this signal could especially reduce the availability of rental properties for the middle class, pushing up rent prices.

He added, “At this rate, the problems in real estate will remain unchanged, turning the market into a tax nightmare where you pay taxes whether you buy or sell. The government must stop trying to steer the market through taxes. Even now, we need to abandon stopgap tax measures and move toward fundamental real estate reform centered on increasing supply.”

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