Lee Hyung-il, the Economic Deputy Prime Minister and nominee for Minister of Finance, apologized for shortcomings in the review of the real estate tax reform, which differentiates tax burdens based on residency status, amid criticism from the ruling party. He also acknowledged concerns regarding his own residency status.
During a confirmation hearing on September 15 before the National Assembly's Finance and Economy Committee, Democratic Party lawmaker Jeong Tae-ho pointed out that the goals of the real estate tax reform were unclear. He noted that discussions aimed at normalizing housing prices and ensuring fair taxation had shifted focus to the distinction between residents and non-residents, causing confusion in policy direction.
Lee explained that the objectives were to establish a housing culture centered on residency, ensure fair taxation, and protect homeowners who live in their primary residence. However, he expressed regret, stating, "I feel sorry that we did not think through some aspects sufficiently."
The government initially planned to reduce the basic exemption for non-resident homeowners from 1.2 billion won to 900 million won but later decided to maintain the current level. It also withdrew a proposal to raise the tax burden cap from 150% to 200%.
Consistency between Lee's history of home ownership and his policy stance became a point of contention. Lawmaker Park Soo-young from the People Power Party questioned whether Lee's ownership of an apartment in Gwacheon for 17 years, with only four months of actual residence, aligned with his commitment to a residency-focused policy.
In response to a similar inquiry from Democratic Party lawmaker Moon Jin-seok, Lee said, "I feel sorry for causing concern among the public regarding the non-residency issue." He clarified, however, that he had owned the property as a lifelong homeowner and had wanted to live there but faced difficult circumstances.
Lee explained that when he purchased the home, the price was approximately 420 million won, and the deposit was around 110 million won. When Moon suggested this could be seen as gap investment, Lee countered, saying, "I bought it without any loans at that time."
In discussions about U.S. investment negotiations, the investment limit and safety measures were scrutinized. Lawmaker Yoon Young-seok from the People Power Party referenced reports that the investment amount for the first project, a power plant, was $22.3 billion and asked whether it would exceed the annual limit.
Lee responded, "We are negotiating to keep the annual U.S. investment at $20 billion and the total at $200 billion." He did not disclose specific details about individual projects, citing ongoing negotiations.
Regarding measures to secure at least 45 business days for investment payments and risk pooling for recovering principal and interest across multiple projects, he stated, "We are also negotiating those aspects." He added that specific negotiation details would be reported to the relevant standing committee in accordance with future laws.
As for economic policy direction, Lee emphasized the importance of stabilizing livelihoods, securing new growth engines, and enhancing external capabilities. He noted that thanks to a semiconductor boom, a 3% growth rate and a per capita income of $40,000 are becoming visible this year.
However, he cautioned against complacency in the current opportunities, stating that preparations must be made for future threats. He pledged to work on stabilizing prices of agricultural products and petroleum, improving distribution structures, and fostering advanced industries. He also mentioned plans to pursue inclusion in the MSCI developed markets index, internationalization of the won, and securing supply chains.
* This article has been translated by AI.
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