Democratic Party: 'No Review of Real Estate Tax Deduction Abolition'

The Democratic Party of South Korea has firmly denied any consideration of abolishing the long-term holding special tax deduction (Jangtukgongje) for real estate, a policy that allows significant capital gains tax reductions for long-term property owners. This clarification addresses recent speculation and a proposed bill by a progressive lawmaker that sought to cap the deduction for individuals selling houses held for over three years at a lifetime total of 200 million won.

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We have not considered any tax reform related to this matter at all.

Kang Jun-hyun, the party's senior spokesperson, explicitly stated that the party has 'not considered any tax reform related to this matter at all.' This stance distances the Democratic Party from the aforementioned bill and aims to quell concerns that such a significant policy change is imminent. The party has characterized the ruling People Power Party's accusations regarding their stance on the Jangtukgongje as 'clear false propaganda' and 'malicious framing,' accusing them of engaging in 'electioneering propaganda' ahead of local elections.

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The claim that abolishing the long-term holding special tax deduction is a 'tax bomb' for owner-occupiers is a logical contradiction and clear false propaganda.

President Yoon Suk-yeol had previously voiced concerns on social media, arguing that the Jangtukgongje, which offers deductions based solely on the duration of ownership regardless of residency, is illogical and potentially benefits property speculation rather than genuine homeowners. He suggested that tax benefits might be better allocated to reduce the income tax burden for long-term employees. The Democratic Party, however, interprets the President's remarks within the context of scrutinizing speculative housing purchases, reiterating their commitment to not reviewing tax reforms that would negatively impact legitimate homeowners. This political back-and-forth highlights the sensitive nature of real estate taxation and its role in ongoing political debates in South Korea.

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Why should the capital gains tax be significantly reduced simply because it has been owned for a long time, if it is not for the purpose of residing in it? If you are not someone who condones real estate speculation, there is no reason to argue for reducing capital gains tax simply because it has been owned for a long time.