(EDITORIAL from Korea JoongAng Daily on Aug. 4)
The Lee Jae Myung administration has held five policy forums on housing supply, ...
President Lee Jae Myung's real estate tax plan places a heavy burden on homeowners, discourages transactions, and may worsen supply and rental pressures. Despite five policy forums on housing, the government has shifted focus to raising property taxes. The comprehensive real estate tax for single-home owners has increased, while the basic deduction for nonresident single-home owners has been reduced.
The government is also making it harder to sell homes, with stricter long-term capital gains deductions and new limits on deductions. These changes contradict the principle of a functioning housing market, where higher property taxes should be accompanied by lower transaction taxes to encourage sales. Homeowners will face increased burdens when buying, selling, or passing on their homes.
The consequences could be severe, including a significant drop in apartment completions, higher jeonse (lump-sum deposit) payments, and worsening rental-market pressures. The government's approach of raising property taxes alone is unlikely to stabilize the housing market, as higher costs will eventually be passed on to tenants.
Instead, transaction taxes must be cut, and housing supply expanded. Otherwise, ordinary citizens will bear the brunt of a "tax bomb."
Written by urgent.news from Yonhap News's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
