President Lee Jae-myung pushed back against the People Power Party's claim that abolishing the long-term holding special deduction (LTSD) for capital gains tax on real estate would lead to a tax bomb, calling it "a logical contradiction and an outright false agitation."
On X (formerly Twitter) that day, the president cited a news report introducing remarks by People Power Party Policy Committee Chair Jeong Jeom-sik and wrote as follows.
Earlier, at a People Power Party floor countermeasures meeting the previous day, Policy Committee Chair Jeong argued that the government and the ruling party's push to abolish the LTSD for single-home owners amounted to "slapping a tax bomb even on citizens who own and live in just one home."
In response, the president said, "No one should deceive the public with such lies to rationalize a wrongful personal claim that hides an improper motive," adding, "especially politicians and journalists who bear public responsibility."
The president explained, "The long-term holding special deduction for capital gains tax, 'regardless of residency,' is a system that drastically cuts capital gains tax solely on the grounds of long-term holding," and "there is a separate system that reduces capital gains tax for long-term residence."
He continued, "If you bought dwellings not to live in but to make money, and the dwelling price went up, the profit is of course taxable—so why slash it drastically just because it was held for a long time?" adding, "It is a lie intended to rationalize a wrongful personal claim that hides an improper motive."
He added, "If earned income, the reward for a sincere year of labor, exceeds 1 billion won, almost half goes to taxes," and asked, "Wouldn't it be better to cut the earned income tax of people who have worked a long time with that money instead?"
The president noted, "If, excluding legitimate holdings such as a single home for actual residence and a single home for actual residence that was temporarily nonresidential due to reasons like a job, we strengthen the holding burden for investment- and speculation-purpose real estate to the level of advanced economies, the longer one tries to hold out, the more it will result in losses," adding, "Once the holding burden is normalized, today's excessively high real estate prices will inevitably normalize."