As the impeachment ruling of President Yoon Suk-yeol approaches, the political arena is heating up over the competition for 'real estate tax cuts.' This is because real estate voting preferences are expected to determine the outcome of the presidential election, regardless of the ruling or opposition party. The plan is to reduce the inheritance tax for those who own a single 'dwelling' in the Seoul metropolitan area or to abolish the increased taxation on multiple dwellings purchased in the provinces. The opposition party even proposed a '10-year guarantee law for jeonse contracts' but retracted it five days later due to concerns that it would replicate the real estate failures of the Moon Jae-in administration and become a liability in the presidential election.
◇‘Moon Jae-in's real estate’ controversy makes Lee 'startled'
Jin Sung-jun, chairman of the policy committee of the Democratic Party, stated at a National Assembly press conference on the 18th regarding the '10-year guarantee for jeonse contracts,' proposed by the party's livelihood committee, that “there are concerns about soaring jeonse prices, so it is undesirable. It cannot be pursued at the party level.” He also mentioned that he would push for ▲expansion of public rental housing, ▲reporting system for monthly rents, and ▲incentives for good landlords as presidential campaign promises.
On the 12th, the Democratic Party held the 'Livelihood Committee led by Lee Jae-myung: 20s Livelihood Agenda' with the attendance of Representative Lee at the National Assembly, announcing 60 policy tasks related to small businesses, self-employment, labor, and finance and housing. This included an amendment to the Housing Lease Protection Act that allows tenants to renew their jeonse contracts every two years and occupy the dwelling for up to 10 years. As concerns arose within the party that they were repeating the previous government's 'real estate failures,' Leader Lee Jae-myung took direct action and withdrew it.
The inheritance tax will also be eased for those who own apartments in Seoul. Recently, Representative Lee announced a 'reform of the inheritance tax,' citing 'the majority of the middle class in the metropolitan area' as beneficiaries. If the Democratic Party's position is realized, the inheritance tax deduction will be 1.8 billion won (flat deduction of 800 million won + 1 billion won for spouses), which will benefit residents of the so-called Han River belt. This includes areas where Representative Lee lost during the last presidential election, such as Mapo, Yeongdeungpo, Dongjak, Seongdong, Gwangjin, and Gangdong.
Last month, an amendment to expand the targets eligible for comprehensive real estate tax deferral applications was passed. This was initiated by Lim Kwang-hyun, a Democratic Party member of the National Assembly's Strategy and Finance Committee. While not a direct tax cut, it considered economic recession and increased tax burdens, including 'jointly owned single-dwelling couples' in the application criteria. In the political arena, there are remarks that “even if the Democratic Party comes to power, it won't tackle real estate.”
◇Ruling party “Abolition of increased taxation on multiple dwellings and spouse inheritance tax”
The ruling party also joined in. Kweon Seong-dong, the floor leader of the People Power Party, stated during the party's floor strategy meeting on the same day that “we will abolish increased taxation on multiple dwellings when purchasing local houses.” He also criticized the Democratic Party's real estate policy again, stating, “The indiscriminate tax bombardment on multiple dwellings by the Moon Jae-in administration, including comprehensive real estate tax rate increases, capital gains and acquisition tax increases, and property price evaluations, was so blind that it can be called 'real estate Taliban.'
It is said that the increased taxation pursued by the Democratic Party administration created a concentration phenomenon around 'one high-priced dwelling in Seoul.' Floor Leader Kweon noted, “The real estate tax system must be approached from a new paradigm,” adding that “we must accept the market function of multiple dwellings operating as private rental businesses and create channels for real estate funds to flow into the provinces.”
Regarding inheritance tax, the People Power Party's stance is to exempt the entire amount of properties inherited by a spouse, regardless of the legal inheritance portion. They also stated that the current limit of 'up to 3 billion won' would be removed. This is being pushed forward as the so-called 'Kweon Seong-dong law.' Despite the rapid increase in real estate prices, the tax regulations have remained unchanged for nearly 30 years, reflecting the claim that it has become a 'middle-class tax.'