People Power Party lawmaker Kim Eun-hye urged on the 25th the Democratic Party of Korea and Democratic Party of Korea presidential candidate Lee Jae-myung to fully abolish the excess profits recovery system from reconstruction, saying, "Clarify your position on the national petition and immediately begin the National Assembly review." As many People Power Party presidential candidates have put forth related pledges, there is a high possibility that they will be adopted as party pledges in the upcoming final election.
Kim said during a press conference held at the National Assembly on that day, "Residents of the reconstruction complex are threatened with losing their homes due to the recovery of excess profits that the Democratic Party pushed through with a fast-track decision 20 years ago."
The recovery of excess profits refers to a system in which the government recovers up to 50% of the excess amount as a charge if members of the reconstruction project gain an average of more than 80 million won in development profits through reconstruction. On the 24th of last month, a petition was submitted to the National Assembly's electronic petition stating that the recovery of excess profits is "an unfair law that imposes excessive and unclear calculation standards on actual residents" and calling for its abolition.
This petition exceeded 50,000 approvals by the deadline for agreeing to the petition on the 23rd, and has now moved to the stage of being referred to the relevant standing committee according to the National Assembly Act. The National Assembly response to the people's petition can be received within 90 days from the date it is referred to the relevant standing committee. However, if further review of the petition's content is necessary, the period may be extended. The relevant committee for the recovery of excess profits has not yet been determined.
If the petition is adopted after being reviewed by the relevant committee, it can be presented to the National Assembly plenary session for deliberation and decision. If the petition to abolish the recovery of excess profits passes in the National Assembly, it is estimated that an average charge of about 100 million won could be reduced for members in a total of over 18,000 households in 51 reconstruction complexes nationwide.
Previously, lawmaker Kim, who was the main proposer of the bill to abolish the recovery of excess profits as the 1st bill of the 22nd National Assembly, claimed, "The Democratic Party has blocked discussions even after reviewing the bill to abolish the recovery of excess profits just once," and added, "This aligns with Lee Jae-myung and the Democratic Party's intent to infringe upon the property rights of the people with land disclosure concepts and land ownership tax." He continued, "The candidate has said, 'Taxes will not control housing prices.' If that is sincere, clarify your position on the abolition of the recovery of excess profits and immediately start the National Assembly review."
According to lawmaker Kim, the reconstruction charge applied only to five complexes for eight years until 2014 since the introduction of the system, amounting to 2.549 billion won, but the actual collected amount was only 1.635 billion won. Also, despite the fact that the exemption period ended in 2018, there have been no charges applied since January 1, 2018. Lawmaker Kim stated that this serves as evidence that "the recovery of excess profits is an outdated system that is practically impossible to apply and is inoperative."
Lawmaker Kim noted, "We will invigorate the reconstruction market and boldly remove unreasonable regulations to achieve housing stability for the middle class and the underprivileged." Kim Sang-hoon, who oversees party policy, also attended the press conference.