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🇰🇷 South Korea /Economy & Trade

President Lee Proposes Curbing Real Estate Speculation with Tax Deduction Reform

From Hankyoreh · (6m ago) Korean Mixed tone

Translated from Korean, summarized and contextualized by DistantNews.

TLDR

  • South Korean President Lee Jae-myung proposed adjusting the long-term holding special tax deduction (Jangteukgongje) for real estate, suggesting a reduction for non-resident holding periods and an increase for owner-occupied periods.
  • President Lee criticized the current system, calling it a policy that encourages real estate speculation rather than protecting housing, and emphasized normalizing this 'abnormal' practice as a survival strategy.
  • The proposal has sparked debate, with the ruling party defending the President's stance as a move towards normalization and the opposition criticizing it as divisive and an attack on tax policy.

Hankyoreh reports on President Lee Jae-myung's strong stance regarding the long-term holding special tax deduction (Jangteukgongje) for real estate. The article frames the President's comments as a direct response to political opposition and an attempt to curb speculative behavior in the housing market.

It is not a housing protection policy but a 'housing speculation encouragement policy' to reduce capital gains tax simply because one has held property for a long time as an investment, especially in high-priced homes, without even living there.

— Lee Jae-myungPresident of South Korea, commenting on the real estate tax deduction policy on X.

President Lee's remarks, made via social media, are particularly sharp, labeling the current system as a 'housing speculation encouragement policy' rather than a housing protection measure. He argues that reducing deductions for non-resident holding periods and increasing them for owner-occupied periods is the logical step to normalize the market. His rhetoric emphasizes that ending this 'abnormal' practice is crucial for the nation's survival, directly confronting those he accuses of fueling real estate speculation.

Normalizing the abnormal, escaping real estate speculation is the ultimate survival strategy for this country.

— Lee Jae-myungPresident of South Korea, emphasizing the importance of reforming real estate speculation.

The article details the current structure of the Jangteukgongje, which allows for deductions of up to 80% of the capital gains based on holding and residency periods. The proposed changes, particularly concerning non-resident holding periods, are expected to be the focus of any reform.

Criticizing the long-term holding special tax deduction as a 'speculation encouragement policy' is a direct denial of the purpose of tax policy and public common sense.

— Park Sung-hoonSenior Spokesperson for the People Power Party, criticizing President Lee's remarks.

From a South Korean perspective, as covered by Hankyoreh, this issue is deeply intertwined with broader concerns about housing affordability and economic inequality. The President's framing of the debate as 'normalization versus speculation' resonates with public sentiment that has long been frustrated by perceived market manipulation. The strong reactions from both the ruling and opposition parties highlight the political sensitivity of real estate policy in South Korea. The article implicitly contrasts the President's direct, almost populist, communication style with the more measured, though politically charged, responses from other parties, showcasing a dynamic political discourse centered on a critical economic issue.

The President's SNS remarks reaffirm the government's consistent philosophy of returning real estate from a 'buying target' to a 'living space'.

— Im Se-eunSenior Deputy Spokesperson for the Democratic Party, supporting President Lee's stance.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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