The construction industry has claimed that various tax reductions and the expansion of local unsold apartment purchases are necessary to stimulate demand in the dwellings market under the newly launched Lee Jae-myung government.
Han Seung-gu, chairman of the Construction Association of Korea, issued a statement welcoming the inauguration of the 21st president on the 4th and suggested directions for improving the construction industry regulations. He noted that with the rising cost of raw materials, high interest rates, and ongoing regulatory tightening in labor and environmental sectors, the number of construction companies going out of business nationwide has reached its highest level in 19 years, highlighting the need for various regulatory relaxations and support from the government.
Chairman Han argued for the necessity of tax reform to stimulate demand in the dwellings market. He said, "We need to relax the acquisition tax and heavy tax rate, apply the basic tax rate for transfer tax, and abolish the comprehensive real estate tax surcharge," and added, "The acquisition tax for unsold properties should be reduced by 50%, and transfer tax should be completely waived for five years. We must normalize the dwellings market by expanding the scale and area of unsold apartment purchases and realizing purchase prices."
Chairman Han also claimed that the serious accident punishment law should be revised to the serious accident prevention law to promote a culture of safety in construction sites by ensuring autonomous safety management and secure business activities.
He raised the necessity of three major laws to eradicate illegal activities of construction-related labor unions. He demanded the legislation of the so-called 'Construction Site Normalization Act,' which was proposed by People Power Party lawmaker Eom Tae-young to eliminate illegal activities of construction unions. The proposed bill is aimed at enhancing the effectiveness of suppressing illegal activities at construction sites by granting special judicial police authority for the hiring of specific construction workers and extortion. He added that it is necessary to legally establish the grounds for additional costs associated with extending the construction period in ongoing projects to secure appropriate construction costs.
Chairman Han said, "The 21st presidential election should serve as a pivotal moment to breathe new life into the crisis-hit construction industry and effectively respond to the challenges of the Fourth Industrial Revolution," and added, "The next government should implement special measures and bold regulatory reforms to revitalize the stagnant construction market, and I hope that through the integration of smart advanced technologies, the construction industry will transform into a sustainable future growth industry and a technology innovation industry."
Jeong Won-joo, chairman of the Korea Housing Constructors Association, also stated that "excessive government market intervention can distort the market and dampen its self-sustainability," and emphasized that it is important to implement a pro-market housing policy based on supply and demand principles.
Chairman Jeong stressed the urgency of measures to stimulate housing demand and boost regional economic vitality, specifically suggesting ▲an increase in supply of dwellings to stabilize housing prices ▲resolving unsold housing issues and stimulating demand to enhance regional economic vitality ▲providing liquidity support for housing businesses to overcome crises.
Chairman Jeong asserted that "there are excessive regulations piled up in conducting housing business currently," and added, "These excessive regulations need to be gradually relaxed, and a supply roadmap that matches the housing demand in the metropolitan area should be presented."
He further claimed that "the expanding polarization between the Seoul metropolitan area and regional areas is an urgent issue, labeled as extreme polarization," and stated that "tax support such as temporary exemptions on transfer tax for unsold property purchases, the reimplementation of rental registrations for apartment purchases, relaxation of lending regulations and interest rate reductions, and conversion of mid-term group loans to final payments must be carried out."