On the 26th, it was reported that Cheong Wa Dae, following the end of the "suspension of the heavy capital gains tax on multiple-home owners," is also reviewing a "reduction of the special long-term holding deduction for single-home owners." Earlier, President Lee Jae-myung posted on X (formerly Twitter) on the 23rd, saying, "Even if it is a single home, if it is for investment or speculation rather than residential use, it is strange to grant a tax break just because it has been held long-term." After a formal process of public discussion, observers say the real estate tax system could reflect the idea.
A Cheong Wa Dae official said in a call with ChosunBiz that day, "The president raised the question of whether it is right to receive tax benefits just because a person held a 'smart single unit' long-term without even living in it." The official said, "The president's style is to put contentious issues up for open debate without hiding them," adding, "The aim is to first share the awareness of problems with the special long-term holding deduction widely to gather opinions and also go through expert review."
Recently, President Lee has been posting a series of comments on X (formerly Twitter) about the real estate tax system. In the real estate industry, the reaction was that "rather than creating new taxes or raising rates, it appears intended to increase the burden of holding real estate by reducing existing suspensions and deductions."
The reduction of the special long-term holding deduction was mentioned in the X post on the 23rd. President Lee said, "A single home is not all the same," and added, "If we inevitably have to adjust the tax system, it is fair to treat nonresidential and residential use differently." He also said, "If a nonresidential single home is for investment or speculation rather than residential use, it is strange to grant a tax break just because it has been held long-term," adding, "The special long-term holding deduction ends up blocking listings and encouraging speculation."
On the 25th, President Lee posted four times about the real estate tax system. The gist was that the suspension of the heavy capital gains tax on multiple-home owners, which ends on May 9, will not be extended. Sharing a report to the effect that "many will choose to hold on, saying they would rather keep than sell and pay massive taxes," Lee said, "If the tax for holding out is higher than the tax paid when selling, could they still do that?"
Meanwhile, with the June local elections approaching, there is also speculation that it will be difficult for the government to move toward strengthening the real estate tax system overall. This is because it could cost votes depending on the region. A Cheong Wa Dae official said, "In cases of actual residence, granting long-term holding benefits is consistent."