[Column] 21 Years After the 8.31 Measures, Real Estate Speculation Remains Unchecked

Twenty-one years after South Korea's "August 31st Comprehensive Real Estate Measures" aimed to end property speculation, the debate over their effectiveness and the nation's approach to housing affordability continues to evolve.

Announced in 2005 by the Roh Moo-hyun administration, the measures sought to curb rampant speculation by lowering the tax base for the comprehensive real estate holding tax and introducing aggregate taxation per household, significantly increasing taxes for multi-homeowners. Then-Deputy Prime Minister Han Duck-soo declared, "Real estate speculation is over," while President Roh Moo-hyun vowed, "Even if the sky splits in two, I will catch real estate."

However, the immediate media reaction was fierce. Headlines screamed "Tax Bomb" (Chosun Ilbo), "Holding Tax for Multi-Homeowners Skyrockets Up to 3 Times" (JoongAng Ilbo), and "Punitive Taxation" (Maeil Business Newspaper). The author recalls feeling angry at these reports, which often highlighted luxury apartments like Tower Palace as examples of "tax bombs." Yet, official government data from the time showed that the holding tax for a house valued at 920 million won was only 50,000 won (excluding property tax), suggesting significant exaggeration.

Over the years, policies have swung between easing and strengthening, with subsequent administrations like Lee Myung-bak, Moon Jae-in, Yoon Suk-yeol, and Lee Jae-myung all taking different approaches. The initial promise that the holding tax would be difficult to change, like the constitution, proved false as policies shifted with each new government. Even the opposition party, which initially welcomed parts of the 8.31 measures, later advocated for lower tax rates.

Today, the number of households subject to the holding tax has increased, and conservative media continues to raise concerns about the impact on tenants, amplifying anxieties. The average price of Seoul apartments has more than doubled since 2005, with the average monthly wage remaining significantly lower. This has created a society where owning a home in Seoul is increasingly becoming an inherited privilege, leading to widespread anxiety. While regional development and relocating the capital are long-term solutions, the past two decades have taught a crucial lesson: tax justice and controlling housing prices must be separated, and reform is lost when a government changes. Sustainable policy requires national consensus and gradual, consistent implementation, a difficult feat in the current political climate.