Blue House: No Plans to Control Housing Prices with Taxes, Focus on Housing Supply

The Blue House stated on August 6 that it has no intention of controlling housing prices through taxation, emphasizing that the upcoming real estate tax reform aims to enhance tax equity rather than serve as a short-term market stabilization measure. The government reiterated its commitment to expanding housing supply as a key solution for stabilizing the real estate market and plans to announce supply measures soon.
 
Seong Gi-hong, the Blue House's Chief of Public Communication, appeared on CBS Radio's 'Park Seong-tae's News Show' and said, "The goal of this real estate tax reform is to rationalize the real estate tax system in a way that promotes fair taxation and tax equity."
 
He explained that the government has considered a sustainable and rational real estate tax system after extensive discussions and gathering public opinions, stating, "The core is to protect homeowners with one residence as much as possible while gradually normalizing the burden on properties above a certain value, non-residential properties, and multiple-homeowners."
 
Seong also announced plans for separate supply measures to stabilize the real estate market, saying, "We are devising multifaceted measures that include expanding housing supply and rationalizing housing finance, and we plan to announce policies that address supply issues as soon as possible." He noted that while the specific timing of the announcement is not yet confirmed, it will be made in a timely manner.
 
In response to concerns about the slow pace of existing housing supply plans, he stated, "The government is approaching this with a sense of urgency, and I would like to say that we are in a race against time in the supply sector." He added, "The President is directly addressing administrative issues and regulations that hinder supply, urging relevant departments to come up with extraordinary solutions that break away from past practices to secure supply volumes."
 
Regarding worries that the tax reform could shift the burden onto renters and reduce the availability of rental properties, Seong acknowledged the media's concerns and public voices but countered, "It is structurally difficult for the increase in property taxes to be entirely passed on to tenants."
 
On the differences between the central government and local governments regarding supply measures, such as the lifting of development restrictions in Seoul, he provided a general response, stating that ongoing consultations will continue. Seong emphasized, "The proactive and positive attitude of local governments is also important for housing supply, and we will work together to resolve specific differences through discussions between the central and local governments."
 
Additionally, the Blue House hinted at the possibility of further measures regarding the concentration of single-stock leveraged exchange-traded funds (ETFs), which have contributed to recent stock market volatility.
 
Seong remarked, "The recent significant volatility in the stock market is an unprecedented phenomenon in our market's history," adding, "Investor anxiety is understandably high, and the President is clearly aware of this situation."
 
He identified the causes of stock market volatility as the increased fluctuations in global semiconductor stock prices, the high concentration on certain large semiconductor stocks like Samsung Electronics and SK Hynix, and foreign investors' profit-taking and asset reallocation.
 
When asked about claims that Kim Yong-beom, the head of the Blue House Policy Office, led the introduction of single-stock leveraged ETFs and the associated accountability, Seong avoided a direct response. He stated, "The Policy Office head and all Blue House officials are carefully examining the current situation, its causes, and potential measures," emphasizing that monitoring the market and preparing responses is currently more important than discussing Kim's accountability or position.
 
The Blue House clarified that President Yoon Suk-yeol's recent comments regarding the abolition of supplementary investigative powers were not made without understanding the intent or key contents of the revised Criminal Procedure Act. The President had sparked controversy the previous day during a report on the Ministry of Justice and the Ministry of the Interior and Safety, asking, "Aren't prosecutors allowed to investigate? Is it prohibited?"
 
Seong explained, "The President is certainly well aware of the overall intent and key contents of the revised Criminal Procedure Act," adding that the comments arose during a process of confirming with the two ministers the extent and nature of prosecutors' involvement in investigations under the new law. He stated, "As we are overhauling the criminal justice system for the first time in over 70 years, it is crucial for the Public Prosecution Service, the Serious Crimes Investigation Agency, and the police to establish a system that prevents harm to the public." Seong concluded that the President's question was aimed at preparing for all potential scenarios that may arise under the new legal framework.