Differentiated Taxation for Multi-Home Owners Under Consideration, Says Presidential Aide

South Korea's Presidential Chief of Staff for Policy, Kim Yong-beom, indicated on July 19th that decisions have largely been made regarding differentiated taxation for ultra-high-priced homes. He stated, "A decision has been made to some extent. What the appropriate level is, and how to set the criteria, are what remain." The specifics of these criteria and the tax burden levels are expected to be detailed in the tax revision bill slated for release at the end of July.

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A decision has been made to some extent. What the appropriate level is, and how to set the criteria, are what remain.

Kim explained that during government-hosted real estate forums, significant opinions emerged favoring differential treatment for multi-home owners versus single-home owners, differentiating between owner-occupied and non-owner-occupied homes, and applying different rules even to owner-occupied homes if they are ultra-high-priced. He suggested that the final decision, to be incorporated into the tax revision bill around late July, will be influenced by discussions at the "Real Estate Policy Grand Forum" on July 23rd, which President Lee Jae-myung will attend.

Regarding the argument that property taxes should be lowered if capital gains taxes are raised, Kim stated it's "difficult to say uniformly." He proposed that measures could be designed to allow sales within a certain period, with increased burdens for sales beyond that timeframe, ensuring comprehensive design in line with tax fairness principles. He also apologized for the "triple surge" in sales, rental, and monthly rent prices, pledging to mobilize all available housing supply, including through non-apartment purchase-lease programs, officetel supply, and converting commercial land in third-phase new cities into residential areas.

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There were many opinions expressed at the forums that multi-home owners and single-home owners should be treated differently.

Kim mentioned the possibility of expanding residential functions in semi-industrial zones like Yeongdeungpo and Guro and plans to meet with Seoul Mayor Oh Se-hoon to discuss this. However, he expressed caution regarding reconstruction and redevelopment projects, noting that they take at least three to five years to materialize and can initially reduce supply as existing residents must relocate. He deemed them "not a magic key."

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It's difficult to say uniformly (about lowering capital gains tax if property tax is raised).

On a separate note, Kim addressed criticism that single-stock leverage products for Samsung Electronics and SK Hynix are increasing stock market volatility. He found the idea of abolishing these products "difficult to imagine" due to the potential market shock, suggesting that authorities, asset management firms, and securities firms should discuss how to minimize such shocks.

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I am very sorry to many citizens regarding the triple surge (in prices).