Seoul Mayor Oh Se-hoon criticized the government's real estate tax overhaul, saying "the biggest victims of this measure are working people," and argued for a shift to policies centered on expanding supply.
On the 4th, Oh said on his Facebook page, "The government has emphasized expanding supply, but this measure shows no way to increase supply and only strengthens taxes," adding, "Raising taxes does not rein in home prices and could instead make the market more unstable."
Oh pointed to the overhaul of the special long-term holding deduction as the core of this tax reform. He noted, "Going forward, it will be hard to receive tax benefits just by holding a property for a long time; you will have to actually live there to qualify," adding, "The government has sent the market a signal to pay more capital gains tax if you do not live there."
He went on to say there is a strong chance listings will not increase as much as expected in the ultra-high-priced housing market despite the tax burden. He also said that in the middle-class market, more landlords may evict tenants to live in the homes themselves to reduce capital gains taxes, arguing, "If the supply of jeonse and monthly rentals shrinks and rents rise, the biggest damage falls on working people and young people."
He also cited the system's complexity as a problem. Oh said, "For one-home owners who must live in another region for work or livelihood, what are they supposed to do, and how far will exceptions be recognized? It's unclear," adding, "A system that is hard for the public, and even experts, to understand can only fuel confusion and distrust."
He added that while the government aimed at ultra-high-priced dwellings, the market is already showing new moves to reduce taxes. Oh said, "Contrary to the policy's intent, the market is moving to find new ways to cut taxes," adding, "At this rate, the real estate problem will remain as is, and only a 'tax hell'—taxes when you buy and taxes when you sell—will likely worsen."
Oh stressed, "Since the president has set the goal of normalizing the real estate market, the solution must also align with market principles," adding, "The most certain way to stabilize the market is supply, not taxes."
He added, "The market stabilizes when people believe dwellings will continue to be steadily supplied in the future," and said, "Policy direction should be shifted to focus on expanding supply, including redevelopment and reconstruction."