Song Eon-seog, the People Power Party floor leader, said on the 21st that abolishing the long-term holding special deduction effectively turns the capital gains tax, a transaction tax, into a profit-recovery scheme and is no different from seizing the people's assets.
At a floor countermeasures meeting held at the National Assembly that morning, Song stated accordingly, saying, It will ultimately cause real estate to lock up, leading to fewer listings and reducing supply for actual end users, further increasing the burden on young people and newlyweds.
Song said, President Lee Jae-myung's offhand social media remarks are landing like a tax nuclear bomb on single-home ordinary people and the real estate market, adding, The Democratic Party of Korea is rushing to put out the fire by saying there was no discussion of abolishing the long-term holding special deduction, but the current denial appears to be nothing more than an election line with local elections in mind.
He went on, The more serious problem is that the president tossed out such a grave real estate tax issue on social media without any party-government consultation, adding, The naked face of party-government miscommunication is truly appalling. I am very curious whether Chong Won-o, the Democratic Party Seoul mayoral candidate who is the president's 'pick,' agrees.
He added, If the long-term holding special deduction is abolished, even single-home owner-occupiers would have to bear capital gains tax in full without any deduction, and said, Assuming the president's apartment in Bundang was acquired for 360 million won in 1998, used as a primary residence as a one-household, one-home through 2025, and sold for 2.9 billion won, the current capital gains tax is estimated at about 93 million won, but if the long-term holding special deduction is abolished, the tax would surge more than sixfold.
Song said, The president may think it's only about 600 million won, but ordinary residents living in the same apartment are effectively being carpet-bombed with taxes for having the wrong neighbor, emphasizing, Abolishing the long-term holding special deduction is not a simple reduction of deductions but an erasure of the tax base that pushes the middle class into high tax brackets.
He said, It has been a long time since the long-term holding special deduction was restructured so that the deduction rate varies by the number of dwellings and whether it is owner-occupied, and the president should clearly recognize that this is not a special favor but a minimum tax-adjustment mechanism that reflects both actual residence and long-term holding.