A claim has been raised that Minister nominee Lee So-young of the Ministry of SMEs and Startups reaped about 700 million won in book profits over 10 years while owning an apartment in Hongje-dong, Seodaemun-gu, Seoul. In response, the nominee's side countered that after acquiring the apartment, Lee actually lived there for four years until 2020, and since it has not been sold, the profits have not been realized.
According to the nominee's asset disclosure and other records analyzed by People Power Party lawmaker Choi Su-jin of the Trade. Industry Energy. SMEs. and Startups Committee on the 9th, the nominee in Feb. 2016 established a maximum claim amount of 180 million won for a collateralized mortgage and purchased an apartment (84㎡) in Hongje-dong, Seodaemun-gu, Seoul, for 490 million won.
According to the Seoul Real Estate Information Plaza, a dwelling of the same size in the same complex as the nominee's apartment closed at 1.19 billion won on July this year. A jeonse lease for the apartment was signed on the 26th of last month for 640 million won, 150 million won higher than the purchase price.
Choi noted that, considering maximum claim amounts are typically set at about 120%–130% of the actual loan, the nominee is estimated to have purchased the dwellings with about 350 million won in actual funds. Choi argued that, following a rise in dwellings prices, this amounts to about 700 million won in book profits over 10 years.
Choi said the nominee has rented out the apartment since June 2019 and pointed out that Lee is currently a "non-resident single-home owner," renting out the Hongje-dong apartment while living on a jeonse lease in Uiwang, Gyeonggi. Choi then argued that the nominee's real estate holding behavior—having characterized long-term non-resident single-home ownership as "speculative gap investing" and calling for higher taxes—runs counter to the real estate policy stance of the Lee Jae-myung administration and the Democratic Party of Korea.
The nominee's side countered that the expression "gap investing" is not accurate. The Ministry of SMEs and Startups (MSS) confirmation hearing preparation team said, "The nominee lived in the Hongje-dong apartment immediately after acquiring it and lived there with family for four years until Feb. 2020, then moved the residence to Uiwang, Gyeonggi, when running in the 21st National Assembly election."
The confirmation hearing preparation team continued, "The mortgage loan taken out at the time of acquiring the dwellings was fully repaid in 2019," adding, "The 180 million won collateralized mortgage set at the time of acquisition was a security interest related to the mortgage loan and is a different concept from so-called gap investing, which purchases dwellings by using a tenant's jeonse deposit."