Minseok Kim: "Abolishing Long-Term Holding Deduction for Non-Resident Single-Homeowners Is Essentially a Tax Increase"

"Non-resident Tax Changes Must Consider Impact on Rental Market"
Opposes Reducing Comprehensive Real Estate Tax Deduction for Non-residents to 900 Million Won

Minseok Kim, the Democratic Party of Korea’s presidential candidate, commented on the government's real estate tax reform proposal, stating, "Abolishing the holding deduction for non-resident single-homeowners in terms of capital gains tax essentially amounts to a tax increase for those non-resident single-homeowners whose property is worth more than 1.2 billion won."

Minseok Kim, a candidate for the Democratic Party of Korea leadership, attended a TV debate held on the 12th at SBS in Yangcheon-gu, Seoul. Photo by National Assembly Press Photographers Group

On the 14th, Kim stated on his social networking service (SNS), "Regarding the recently announced real estate tax reform proposal, I believe there is a need for discussions to refine the details, assuming overall agreement with the main direction."

He pointed out, "There are a significant number of non-resident single-homeowners in the middle class nationwide, and special attention should be given to the fact that tax changes affecting them may trigger a chain reaction in the entire rental and lease market." Although he agreed with the main direction of the tax reform proposal, Kim made it clear that he essentially opposes key parts such as capital gains tax changes for non-resident single-homeowners.

He continued, "Abolishing the holding deduction for non-resident single-homeowners in capital gains tax would, in effect, increase the tax burden for owners of single apartments worth more than 1.2 billion won in most parts of Seoul. There are concerns that this could also cause negative effects, such as tenants being forced to move out." Earlier, the government's reform proposal included abolishing the 'Special Long-Term Holding Deduction' for capital gains tax in 2029, and replacing it with a 'Long-Term Residency Income Deduction' that only considers the actual period of residence.

He also expressed his opinion on the comprehensive real estate holding tax (so-called 'Comprehensive Real Estate Tax'). Kim suggested, "Even under the current system, non-resident homeowners' tax burden naturally increases due to the rise in official property values, so perhaps it would suffice to simply raise the basic deduction for resident homeowners to 1.4 billion won." He added, "Regardless of whether the owners are living in the property or not, there should be no discriminatory treatment between co-ownership by spouses and single ownership," and also mentioned, "There may be room for discussion regarding incentives for those aged 65 or older to move to non-metropolitan areas."

In its tax reform outline, the government had previously stated it would impose the comprehensive real estate tax only on homes whose official value exceeds 1.4 billion won (increased from 1.2 billion won), while reducing the non-resident single-homeowner’s deduction from 1.2 billion won to 900 million won. Kim expressed his disagreement with this, arguing that the deduction for non-resident single-homeowners should be left unchanged, while the benefits for resident single-homeowners should be maintained.

The government's proposal also stipulates that when spouses jointly own a single home and do not reside in it, they will be treated the same as owners of multiple homes for tax purposes under the comprehensive real estate tax. Kim made it clear that he was against this part as well.

Kim concluded by stating, "With the party convention coming up soon, our party will carefully collect feedback from citizens, experts, and the opposition, and proceed with party-government consultations to revise and improve the details of the reform plan."

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