The Democratic Party of Korea on the 16th said that it has "not discussed this issue in detail between the party and the government" regarding changes to the property holding tax and capital gains tax for the so-called "one smart home" (a single high-priced home). The remark came right after Presidential Office Policy Chief Kim Yong-beom noted the need to subdivide taxable income brackets and raise the top progressive tax rate. As criticism persists that the three rounds of real estate measures have had little effect in stabilizing home prices, the party, ahead of the June local elections, is keeping its distance from tax issues.
Park Soo-hyun, the Democratic Party's senior spokesperson, met with reporters after the supreme council meeting that morning and said, "I understand that Policy Chief Kim Yong-beom, while mentioning real estate supply measures, meant that once supply measures are implemented, these kinds of tax systems should be adjusted," adding, "This was not about tax reform alone, but an opinion that it should be reviewed together with supply as a measure to stabilize real estate prices." He then said there has been no discussion between the party and the government.
Earlier, Deputy Minister Kim said in a media interview the previous day, "Once supply policies are announced and dwelling prices stabilize somewhat, then we should consider tax issues," adding, "Even for the same one home, there is a proposal to apply the property holding tax differently by making the brackets more granular like the income tax—such as 2 billion won, 3 billion won, 4 billion won—and it is an issue that deserves serious consideration."
Income tax applies a progressive system with a top rate around 45%, but compared with that, the brackets for dwelling holding tax and capital gains tax are simple, suggesting they should be adjusted for "tax fairness." Under current law, holding one dwelling long term (three years or more) grants a special deduction of 24% of the capital gain. For holdings of 10 years or more, a maximum deduction rate of 80% applies. For one high-priced dwelling with strong investment value, the top rate is 2.7%, and the comprehensive real estate tax (holding tax) base brackets are classified as ▲ 300 million won or less ▲ 600 million won or less ▲ 1.2 billion won or less ▲ 2.5 billion won or less ▲ 5 billion won or less ▲ 9.4 billion won or less ▲ over 9.4 billion won.