President Lee Jae-myung said on the 9th that, in connection with measures to curb real estate speculation, he would consider strengthening the tax burden on "non-business real estate" held by corporations. Lee presided over the first full meeting of the National Economic Advisory Council at Cheong Wa Dae that day and, after receiving a report on the "economic structure transition measures" from advisory members, said, "We must make it impossible to profit from real estate speculation by any means," and made the remarks.
Lee said, "In the past, non-business real estate of corporations was heavily regulated, but it seems to have disappeared now," and, addressing Kim Yong-beom, the presidential policy chief, added, "Let's review this as a separate item and consider imposing a substantial holding burden on real estate that corporations do not need immediately but are pointlessly holding in large quantities."
In particular, he said, "We will expand (the holding burden) from dwellings, then to farmland, then to general real estate," adding, "Since this has come up today, let's check it in advance." Earlier, at a Cabinet meeting on Feb. 24, Lee said, "Even farmland has become a target of speculation," and ordered sales in accordance with procedures under the Farmland Act after a government-wide full inspection.
◇1% for a combined officially assessed value up to 1.5 billion won, 3% for over 4.5 billion won
Under current law, the tax rates on non-business real estate held by corporations are ▲1% for a combined officially assessed value up to 1.5 billion won ▲2% for up to 4.5 billion won ▲3% for over 4.5 billion won. At this time, the tax base is the amount obtained by deducting 500 million won from the combined officially assessed value of the land. Although Lee did not mention specific figures that day, it appears the approach would be to raise the rates or adjust the deduction amount and tax brackets. Narrowing the scope of "non-business" to tighten the criteria could also be considered.
Lee's remarks on regulating corporate real estate came as Kim Woo-chan, a private advisory commissioner in the growth economy subcommittee, discussed plans to activate MoneyMove and mentioned "disposal of idle real estate," among other steps. Kim said, "Let's invest in a 'shareholder engagement fund' that more actively exercises shareholder rights with greater expertise than the National Pension Service," adding, "If we drive business restructuring, disposal of assets such as idle real estate, and shareholder returns, the efficiency of listed companies will improve across the board."
In response, Lee instructed the policy office to consider regulating non-business real estate held by corporations, saying, "We need to shift corporate and industrial capital from unproductive to productive sectors. Since this has come up, we should make it so that no one can profit at all from real estate speculation."