Vice Minister Lee Sang-kyung of the Ministry of Land, Infrastructure and Transport said there is a possibility that tax reform will be carried out by strengthening holding taxes and lowering transaction taxes going forward.
The Vice Minister appeared on MBC Radio "Kim Jong-bae's Focus" on 16th and said, "During the Yoon Suk-yeol administration, the comprehensive real estate tax, fair market value ratio, and realization rate were lowered, significantly reducing the burden of holding taxes," adding, "There is a need to adjust this part."
The Vice Minister said, "If you raise the burden of holding high-priced homes, demand naturally decreases," and emphasized, "There needs to be a review of a tax reform direction that strengthens holding taxes and lowers transaction taxes." He added, "As the lead ministry, the Ministry of Economy and Finance is likely reviewing various measures, such as raising the fair market value ratio or adjusting the long-term holding special deduction."
Regarding the decision to designate all of Seoul and 12 areas in Gyeonggi simultaneously as regulated areas and land transaction permit zones, the Vice Minister said it was "an unavoidable measure to block the balloon effect." The Vice Minister explained, "When only specific areas are regulated, the upward price trend has repeatedly spread to surrounding areas," adding, "Considering this experience, we comprehensively designated areas of concern this time."
The Vice Minister also said, "Concerns about a supply shortage and expectations of interest rate cuts have overlapped, increasing factors of market instability," emphasizing the need for the measures by adding, "The government introduced these measures to block such instability at an early stage."
Addressing criticism that the Ministry of Land, Infrastructure and Transport designated land transaction permit zones without prior consultation with the Seoul Metropolitan Government, he said there was "a misunderstanding," adding, "Seoul claims it was notified without consultation, but there is no legal consultation clause—only a procedure for gathering opinions," and emphasized, "We notified them in advance by official document." He added, "As Seoul has been pushing 'Fast-Track Integrated Planning,' not designating permit zones could have led to speculative demand," and said, "There was a need to manage the side effects of such supply policies."
Regarding concerns that side effects such as a rise in jeonse prices could occur due to the Oct. 15 measures, the Vice Minister said, "If demand for gap investing disappears, some jeonse supply could decrease."
Still, the Vice Minister emphasized, "The shift from jeonse to monthly rent is progressing quickly, and the government plans to minimize supply gaps through purchase commitments for non-apartment units." He added, "We are pursuing purchase commitments for 140,000 units focused on villas, officetels, and urban studio housing—non-apartments," and said, "Because construction periods are short, supply can be provided in a short time."