Lee Jae-myung, the president, said on the 4th regarding the tax reform plan the government recently released, "Talking about taxes is difficult for the government as well, but if the tax system is not normalized, fairness issues arise."
The president stated accordingly at a Cabinet meeting held at Cheong Wa Dae that day, "When earned income exceeds 1 billion won, people pay nearly half, but for real estate, even when capital gains are in the 10 billion won range, they pay only a few hundred million won due to various deductions."
He continued, "If it happened by chance while living, then it is right to give a break, but if someone bought for investment and earned tens of billions of won yet paid almost no taxes, that does not align with earned income in terms of fairness," adding, "It also goes against the purpose of housing protection, and that protected speculation."
On the plan to temporarily ease for two years starting next year the heavier capital gains tax on sales of dwellings in designated adjustment areas by multiple-home owners, he said, "There is criticism that after saying (on May) there would be no extension of the grace on the surcharge, we are giving another chance, but that is not true."
He added, "We are not abolishing everything; we are applying the surcharge while opening an exit over two years. Didn't we explain this?" and said, "When discussing policy, I said it must never lead people to think 'I sold early for nothing.'"
In response, Vice Premier Koo Yun-cheol explained, "Originally, owners of two homes face an additional 20 percentage points (p), and those with three homes face 30 percentage points," adding, "Under this plan, if they dispose within one year, owners of two homes face only 5 percentage points and those with three homes 10 percentage points; if disposed within two years, they face 10 percentage points and 20 percentage points, respectively, and after that it reverts to the original."
The president said, "Regarding trust in policy, it is not good to have people say 'the government flip-flops.' We must explain policies well so there is no misunderstanding," adding, "Issues pointed out in the meantime and better suggestions can be incorporated and changes can be made as much as needed because it is before a decision."