Exclusive: Hong Ji-seon faces controversy over family loan after no interest-tax record found

Hong Ji-seon, South Korea’s nominee for land and transport minister, is facing renewed scrutiny over a family loan used in the purchase of an apartment in Seoul. The controversy has been dubbed “mother-in-law privilege,” and a review found no record that she submitted interest-income tax payment details.

Hong and her spouse jointly bought an apartment in Sindorim, Seoul’s Guro district, last May for 1.005 billion won. The month before, one day before an installment payment was transferred, her spouse borrowed 170 million won from her mother.

The agreement deferred repayment of the principal for one year and required monthly interest payments of 651,666 won at an annual rate of 4.6%. This year, the deferment period was extended to three years.

Interest on family loans is classified as income from non-business loans and is subject to a 25% interest-income tax, along with local income tax. Opposition lawmakers have intensified their criticism, saying the nominee failed to pay taxes that should have been due on the borrowing transaction.

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The nominee for land and transport minister did not even pay the taxes that should have been due on the loan transaction used to buy a home through aggressive borrowing.