The ruling and opposition parties clashed over the 'inheritance tax reform' during a full meeting of the National Assembly's Planning and Finance Committee on the 18th. The key point is to raise the current exemption limit of 1 billion won to 1.8 billion won, a proposal from the Democratic Party. The People Power Party agrees to the expansion of the deduction but demands that it be accompanied by a 'reduction in the highest tax rate' and other corporate deductions. In particular, there were criticisms within the opposition party that they are waging a tax cut war while ignoring the revenue shortfall.
Democratic Party lawmaker Lim Kwang-hyun said during the inquiry that "the nationwide apartment sales price index increased by about three times from 30.9% in 1997 to 89.4% in 2025, and during the same period, in Seoul, it increased by about four times," adding that "on the other hand, the spousal deduction and lump sum deduction for inheritance tax have remained the same for nearly 30 years." He continued, saying that "what is urgent is not a tax cut for the super-rich, but fine-tuning the inheritance tax for the middle class and realizing the deductions," and requested the government to join in ensuring the residential stability of middle-class individuals who own a home.
Under current law, inheritance properties below 1 billion won (lump sum deduction of 500 million won + spousal deduction of 500 million won) are tax-exempt. With the recent rise in housing prices, the political arena is discussing raising this limit. This is also a measure that considers the 'middle-class' voter sentiment in the lead-up to a presidential election. The Democratic Party proposed Lim Kwang-hyun's bill (1.8 billion won; lump sum 800 million won + spousal 1 billion won), while the People Power Party presented Song Eon-seok's bill (2 billion won; lump sum 1 billion won + spousal 1 billion won) as a representative proposal.
However, the People Power Party's position is to discuss ▲ raising the child deduction limit ▲ lowering the highest inheritance tax rate ▲ expanding the family business inheritance tax exemption ▲ abolishing the premium valuation of major shareholders' stocks at the same time. The Democratic Party opposes this, arguing that 'relief of the middle-class tax burden' is unrelated to lowering the tax rate, stating that apart from adjusting the lump sum and spousal deduction limits, it would lead to 'wealth inheritance' and result in 'tax cuts for the rich.'
Park Soo-young, the ruling party's secretary, noted that "Representative Lee Jae-myung is calling for the inheritance exemption limit for one home to be raised to 1.8 billion won," adding, "If that's the case, we should also consider raising the child deduction limit for cases where there is no spouse but only children." The current child deduction for inheritance tax is 50 million won per person. The government and ruling party are pursuing a legal amendment to increase this to 500 million won, a tenfold increase.
◇Opposition Party: 'Tax cut war amid revenue shortages' 'Deprivation feeling for low-cost housing'
During the full meeting, there were also differing opinions within the opposition party. Democratic Party lawmaker Oh Gi-hyung stated, "Continuously discussing the easing of inheritance tax, the current revenue shortfall is piling up," and added, "Both parties should not engage in a tax cut competition. In this situation, isn't it necessary to first discuss how to fill the specific item shortfall and how to secure finances, and for the government to explain this?"
There were also comments regarding the concept of 'middle class.' Cha Kyu-geun, a member of the Justice Party, said that "I find it difficult to agree with the argument that easing inheritance tax deduction criteria relieves the burden on the middle class," adding, "Can a person owning a house worth 1.8 billion won be considered middle class?"
He pointed out that the average sales price of apartments in the metropolitan area is 690 million won, and in northern Seoul, it is below 1 billion won, saying, "Only in three regions—Gangnam, Seocho, and Songpa—does the average housing price exceed 1.8 billion won," and stated, "A person owning an apartment in Gangnam's three districts is not middle class but a high net worth individual," adding, "Easing the inheritance tax deduction gives a sense of deprivation to those who own low-cost dwellings."
Meanwhile, the Planning and Finance Committee approved an amendment to the Special Taxation Restriction Act to increase the integrated investment tax credit rate for semiconductor corporations by 5 percentage points. The expiration date for the tax credit will also be extended by seven years until the end of 2031. Once the amendment is implemented, the tax credit rate for semiconductor R&D and facility investment will rise to 20% for large and medium-sized enterprises and 30% for small businesses.