Koo Yoon-chul on Calls to Ease Loan Regulations: "Considering Targeted Support... Measures to Be Announced Soon"

Koo Yoon-chul, Deputy Prime Minister for Economy and Minister of Strategy and Finance.

Koo Yoon-chul, Deputy Prime Minister for Economy and Minister of Strategy and Finance, stated on the 7th that "we are currently considering targeted support measures to ease burdens on ordinary real demand homebuyers by relaxing loan regulations," adding, "We will announce additional measures soon."

In an appearance on the MBC radio show "Kim Jongbae’s Focus," Koo addressed criticisms that the tax reform plan announced on the 3rd would allow only cash-rich buyers to purchase properties in Gangnam unless loans are made more accessible. He responded, "I agree with the need for protective measures for actual demand homebuyers, such as young people, newlyweds, and low-income households," reiterating plans for new initiatives.

He continued, "We will increase the housing supply as quickly as possible and especially expand the supply of non-apartment types of housing. In terms of housing finance, we will make every effort to help relieve difficulties faced by newlyweds and the younger generation."

Regarding the newly announced tax reform plan, Koo explained, "For homes that are owner-occupied and valued at less than 3 billion won (which is 99% of all housing owners), the tax burden will be reduced," adding, "Tax normalization was only targeted at the top 1% of homeowners."

Addressing the decision to set the super high-priced standard at 4 billion won, Koo said, "We see this as a working definition since tax normalization occurs between 4 billion and 5 billion won." He noted that the system was designed to make the tax burden more realistic for homes valued over 4 or 5 billion won, while those valued at 3 billion won or less (about 99% of all houses) were structured to protect real owner-residents.

Concerning concerns that the increased tax burden might be passed on to tenants as higher rent or jeonse fees, Koo stated, "If such changes emerge gradually, we will respond by expanding the monthly rent tax deduction for tenants and by increasing housing supply."

On the topic of the phased application of heavier capital gains taxes on owners of multiple homes, he stressed, "This is absolutely not a deferment," emphasizing that "with the change to a price-based system, applying the previous surcharges all at once would place an excessive burden, and this measure reflects feedback on that issue."

He explained that the capital gains tax surcharge for owners of multiple homes in regulated areas will be added to the basic rate as follows: for two-home owners, five percentage points in 2027, ten percentage points in 2028, and twenty percentage points after 2029; for those owning three or more homes, ten, fifteen, and thirty percentage points, respectively, will be added in sequence. He explained that this means there will be a temporary easing of the heavy taxation policy for multiple-home owners.

Regarding the change from the long-term ownership special deduction to a long-term residency income deduction, Koo explained that "by distinguishing between residency and mere ownership, the goal is to foster a housing market focused on actual residence." He added, "Exceptions deemed unavoidable—such as mandatory school enrollment, job transfers, illness, school relocation, overseas assignments, caring for parents, or other inevitable circumstances—will be recognized to the greatest extent possible." He further remarked, "We will collect public opinion again and review this when revising next year's enforcement ordinances."

In response to criticism that offering capital gains tax relief to single-home elderly owners moving to non-metropolitan areas is a modern version of Goryeojang (elder abandonment), Koo countered, "It is a matter of personal choice, not forced relocation."

He explained that, during the public feedback process, they incorporated suggestions to provide incentives for elderly homeowners struggling with increased taxes if they decide to move outside the metropolitan area, clarifying this is the reason for introducing such incentives.

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