"Tax Reform Fails to Curb Housing Prices, Only Raises Rents... Oh Se-hoon Holds Debate with Experts and Citizens"

Seoul Holds Public Debate on Real Estate on August 6

Focusing on Tax Reform, Transactions, and the Rental Market

Seoul Mayor Oh Se-hoon criticized the government's real estate tax reform plan, saying, "It has failed to control housing prices while only raising jeonse (long-term deposits) and monthly rental costs." He also pointed out, "There are concerns that elderly people, who have held on to real estate for a long time but do not have good cash flow, will be forced to sell their properties due to tax issues."

Seoul Mayor Oh Se-hoon is speaking at the 'Citizens' Grand Debate for Real Estate Normalization' held on the 6th. Seoul City

Mayor Oh made these remarks at the "Citizens' Grand Debate for Real Estate Normalization" held for 110 minutes at Seoul City Hall on August 6. The debate was attended by more than 50 citizens and experts who discussed topics such as ▲tax reforms ▲real estate transactions ▲the jeonse and monthly rent market ▲and housing supply.

The participants mainly argued that the burden on landlords had increased due to the real estate tax reform plan announced by the government on August 3, and that this burden is being passed on to tenants in the jeonse and monthly rent markets.

Park Joon, a certified realtor and debate panelist, said, "Due to the current tax reform, both owners and buyers have adopted a wait-and-see attitude. Owners who used to rent out their properties are now moving in themselves, so the available jeonse and monthly rental listings have fallen from 50-80 to under 10. As a result, prices have risen significantly." Lee Chang-moo, a professor at Hanyang University, also criticized, "The market currently targeted is the super-high-priced apartment sales market, but the final place to feel the impact will be the jeonse and monthly rent markets." He added, "There is no consideration for rental households such as younger generations who need to benefit from Seoul's employment accessibility."

Choi Wang-kyu, a tax accountant at Cham Tax Corporation's Mapo branch, said, "Most of my recent consultations are about tax issues for landlords." He added, "Reducing the long-term ownership special deduction for existing registered rental housing providers is a major problem." He went on to argue, "This tax reform plan completely ignores the legal stability and predictability of those who registered their rental businesses in good faith based on previous government policies, and it needs to be reconsidered."

There were strong calls for solutions that leverage the private sector’s function for co-prosperity, rather than tightening punitive regulations on owners of multiple homes in order to solve the shortage of jeonse and monthly rental properties.

Park Hyunho, an owner with two homes in a single household, said, "Seoul’s rental market is currently suffering from severe instability, and public rental housing alone cannot meet the residential needs of this massive city. Owners of multiple small homes valued at less than 500 million won play a crucial role in the market as capillaries. To achieve the goal of housing stability, please provide rational institutional mechanisms that allow the market to function and enable genuine demand-side renters and rental suppliers to coexist, rather than relying on excessive punitive regulations."

Professor Kim Jiyeob of the Department of Architecture at Sungkyunkwan University stated, "To bring real estate prices to a reasonable level, the government should reduce demand and increase supply. Supplying suitable housing according to the income level of each household is a public responsibility, while the rest should be handled by private sector initiatives such as redevelopment projects or private rental housing."

In conclusion, Mayor Oh said, "I was struck by the comment that 'raising property holding and capital gains taxes significantly feels like a form of state violence.' From the perspective of ordinary citizens, does this tax reform really offer any practical help? Rather, it may only result in making it harder to find rental or jeonse housing, and raise the risks of higher deposits and rental costs. I am worried that this will only cause more concerns."

Seoul Mayor Oh Se-hoon is listening to the participants' opinions at the "Citizens' Grand Debate for Real Estate Normalization" held on the 6th. Seoul City

Meanwhile, Mayor Oh strongly criticized the central government, saying that inconsistent policy signals and a hostile stance toward redevelopment projects are sending wrong signals to the market. He said, "The biggest problem is not even the discord between the central government, Seoul City, or local governments, but rather the divisions within the central government itself. Implementing hostile policies that restrict finance and taxes while telling landlords to supply more is extremely confusing for those looking to do business in the market."

Regarding his luncheon meeting the previous day with Kim Yongbum, policy chief at the Presidential Office, Mayor Oh said, "The president must be aware that new supply increases by 40% for reconstruction and 25% for redevelopment, but still stated in a public forum, 'If new supply isn't increasing much, is there any reason to try hard?' That sends a message to the market: the government is hostile to redevelopment. I strongly pointed out that the current administration is likely to send a wrong signal to the market by making it difficult to expect new housing supply through redevelopment projects."

He further argued, "The government's concern that 'there may be side effects such as increased rent and jeonse costs during the relocation period for redevelopment project sites' is an example of putting the cart before the horse. Expressing a hostile stance because of concerns about side effects is misguided." He added, "I also expressed my views on other issues, such as the lifting of green belt restrictions and the utilization of semi-industrial zones."

In particular, he emphasized, "There have been reports that some are considering supplying apartments by utilizing the Children's Garden in Yongsan Park. However, as citizens are struggling to endure the heatwave season, it is the duty of the Seoul Mayor to preserve as much green space in the city as possible. I want to make it clear that Yongsan Park cannot be used, even in part, for residential development purposes."

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