Minister Kim Yun-duk of the Ministry of Land, Infrastructure and Transport said on the 12th that the government is preparing a plan to overhaul property holding taxes, including for owners of a single ultra-high-priced, non-resident home.
The Minister appeared on CBS Radio's "Park Sung-tae's News Show" that day and, when asked whether owners of a single ultra-high-priced, non-resident home would also be included in the property holding tax overhaul, said, "Of course they are included."
When asked whether the burden of property holding taxes would rise, the Minister said, "Yes," adding, "The idea that simply owning a home is not economically beneficial encapsulates all the aims and direction of the government's policy."
The Minister added, "There is no reason to own dwellings you don't live in," and emphasized, "We will pursue a consistent policy that owning dwellings for speculative or investment purposes, apart from the home you live in, is economically more disadvantageous."
The Minister said, "There is also the issue of the so-called 'one smart home,' and I believe there must be strong government measures, including for a single non-resident home," adding, "We are preparing measures now."
Regarding criticism from some quarters that raising property holding taxes could allow multiple-home owners to pass the tax burden on to tenants, the Minister said, "In the jeonse and monthly rent market, the base for setting jeonse is home prices," adding, "Jeonse prices cannot rise more than home prices," and emphasized, "In the real estate market, fundamentally, bringing real estate prices onto a downward stabilization path benefits those without homes who live on jeonse or monthly rent."
On the current long-term holding special deduction (Jangteuk Gongje) on capital gains tax that non-resident single-home owners and multiple-home owners receive, the Minister said, "Home prices have risen so much that, compared with the taxes paid by salaried workers, the taxes they paid are at an unreasonable level," adding, "We will have to fine-tune the overall tax system."
The Minister went on, "Real estate policy is not only about supply, taxes, and finance; liquidity management is also very important," adding, "We must also prepare and deliberate on monetary policy."
The Minister said the government would quickly boost supply by converting commercial spaces into dwellings. The Minister explained, "We plan to rapidly renovate commercial spaces into dwellings to supply them, and especially, as single-person households are increasing, we will adopt a supply method for premium one-room dwellings targeting them to increase supply in the very short term," adding, "We will also invigorate purchase-based public rentals."
The Minister added, "We are continuously monitoring the issue in private redevelopment projects where (relocated residents) must find jeonse or monthly rentals and move out," and said, "We will activate various administrative support measures that the government can mobilize for ultra-short-term dwelling supply and to accelerate private redevelopment projects."
On whether to lift land transaction permit zones across all of Seoul and parts of Gyeonggi Province, the Minister said, "Because they help stabilize the real estate market, we are not considering lifting (the permit zones)," adding, "We will push the policy forward consistently."