President Lee Calls Opposition's 'Tax Bomb' Claims 'False Propaganda'

President Lee Jae-myung has strongly refuted the opposition's claims regarding the abolition of the long-term holding special deduction for real estate capital gains. The People Power Party had labeled the move a "tax bomb" for homeowners, but President Lee dismissed this as "clear false propaganda." He emphasized that the current deduction is based purely on the duration of ownership, not on whether the property was a primary residence, differentiating it from other tax relief measures.

In a social media post, President Lee explained that the deduction disproportionately benefits those who buy property for investment rather than living in them. He questioned why individuals holding property for profit should receive tax breaks simply for owning it for an extended period, especially when compared to the tax burden on earned income. This highlights a fundamental disagreement on how property wealth should be taxed and whether it should be treated as an investment vehicle subject to market forces or a protected asset.

The administration plans a gradual phase-out of the special deduction, offering a grace period and a partial reduction before full abolition. This approach aims to mitigate market shock and provide homeowners with opportunities to sell. Furthermore, President Lee indicated a preference for codifying this change into law rather than relying on executive decrees, ensuring its permanence beyond a single administration. This move is intended to deter speculation and encourage the normalization of inflated real estate prices by making prolonged ownership of non-primary residences financially disadvantageous.

From our perspective at Hankyoreh, this debate underscores a critical issue in South Korean society: the persistent challenge of real estate speculation and its impact on economic inequality. While the opposition frames the policy change as a burden on ordinary citizens, we see it as a necessary step towards a more equitable tax system and a more stable housing market. The government's proposed measures aim to curb speculative investment and ensure that property ownership is primarily for housing needs, not just profit generation. This aligns with a broader societal goal of making housing more accessible and affordable for all citizens, a concern that resonates deeply within the Korean public.