Concerns and criticisms regarding the government's real estate tax reform plan were voiced during a full meeting of the National Assembly's Land, Infrastructure and Transport Committee. Lawmakers from both the ruling and opposition parties expressed worries that increased taxes on non-resident homeowners could harm genuine homebuyers and destabilize the rental market.
On August 11, the committee meeting featured questions directed at Minister of Land, Infrastructure and Transport Kim Yun-deok and First Vice Minister Kim I-tak regarding the tax reform plan and the government's response to the housing market.
The main issue was the proposed tax increase for non-resident homeowners. The government aims to strengthen tax burdens on these homeowners to establish a housing market order focused on actual residents. However, concerns were raised that even unavoidable circumstances such as work, education, health issues, or caring for parents could fall under this regulation.
Democratic Party lawmaker Kang Deuk-gu stated, "There are opinions that we need to reconsider the sunset provision for non-resident homeowners who have become so due to unavoidable reasons like work or education. We need to carefully consider policies to prevent harm to these individuals."
The potential instability in the rental market was also highlighted. Kang noted, "If we regulate non-resident homeowners, they will either have to live in the property or sell it. This could force tenants to vacate, raising concerns about rent increases."
The opposition party strongly criticized the government's policies. People Power Party lawmaker Kang Dae-sik pointed out, "Looking at the cumulative change rate of housing sales in the metropolitan area during the first year of the current administration compared to the Roh Moo-hyun administration, the increase rate is the highest under this government." He added that rental prices in Seoul continue to rise to record levels.
Kang also criticized the real estate policies of the Lee Jae-myung administration, stating, "If I were to give a grade, it would be an F. There is a saying that taxes encourage people to sell their homes while loans discourage them from buying."
People Power Party lawmaker Kim Mi-ae raised concerns about the possibility of landlords passing on the tax burden to tenants. She remarked, "While the government aims for market stabilization and a focus on actual residents, landlords are likely to reflect the increased tax burden in rental prices or convert leases from jeonse to monthly rent."
She emphasized, "Ultimately, the most vulnerable, the tenants, will bear the brunt of this. The impact on the rental market should have been thoroughly analyzed before announcing the tax reform plan."
The issue of tax equity for couples owning a single home was also discussed. People Power Party lawmaker Kim Eun-hye questioned, "Couples living together in one home are now facing tax burdens similar to those of multiple homeowners. The president has encouraged marriage, but shouldn't this tax approach be improved?"
Kim added, "Is it reasonable for one part of the government to promote marriage while another part encourages separation or divorce? We need to consider adjustments to the system."
Minister Kim Yun-deok indicated that there is room for adjustments to minimize market shock. He stated, "It is important to work to reduce market shock through phased implementation and to continue monitoring public opinion."
First Vice Minister Kim I-tak also responded, "Since we are in the legislative notice period, I believe adjustments can be made."
Questions regarding supply policies also arose. Democratic Party lawmaker Kim Nam-kun criticized the supply policies of Seoul Mayor Oh Se-hoon, stating, "The current housing and rental crisis stems from the supply policies during Oh's four-year term."
Kim pointed out, "While Mayor Oh denies a significant drop in housing supply, even based on permit standards, it is only 62% of the target. There is widespread criticism that the so-called rapid integrated planning is neither rapid nor integrated, merely a name."
* This article has been translated by AI.
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