Blue House: No Plans to Control Housing Prices with Taxes

The Blue House stated on August 6 that it has no intention of controlling housing prices through taxes, 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.

Sung Ki-hong, the Blue House spokesperson, 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."

Sung explained that the government has considered a sustainable and rational real estate tax system after extensive discussions and public input, stating, "The core principle is to protect homeowners with one residence as much as possible while gradually normalizing the burden on properties valued above a certain amount, non-residential properties, and multiple-home owners."

He 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, Sung stated, "The government is approaching this with a sense of urgency, and I would describe our efforts in the supply sector as a race against time." He added, "The President is directly addressing administrative issues and regulations that hinder supply, urging relevant ministries 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, Sung acknowledged the media's concerns and public feedback but countered, "It is structurally difficult for the increase in property taxes to be entirely passed on to tenants."

On the differing views between the central government and local authorities regarding supply measures, such as the lifting of development restrictions in Seoul, Sung provided a general response, stating that ongoing consultations will continue. He emphasized, "The proactive and positive attitude of local governments is also crucial 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.

Sung 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 fully aware of this situation."

He identified the causes of stock market volatility as the increased fluctuations in global semiconductor stock prices, high concentration in major semiconductor stocks like Samsung Electronics and SK Hynix, and foreign investors realizing profits and reallocating assets.

When asked about claims that Kim Yong-beom, the Blue House policy chief, led the introduction of single-stock leveraged ETFs and the associated accountability, Sung avoided a direct response. He stated, "The policy chief and all relevant officials are carefully examining the current situation, its causes, and potential measures, and it is more important to focus on monitoring the market and preparing responses at this time," suggesting that stabilizing the stock market and developing follow-up measures take precedence over questions of accountability.

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 content 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, "Haven't prosecutors been allowed to investigate? Is it prohibited?"

Sung explained, "The President is fully aware of the overall intent and key content of the revised Criminal Procedure Act," adding that the comments arose during a process of confirming with the two ministers the level and content of prosecutors' involvement in investigations under the joint investigation headquarters.

Sung concluded, "As we overhaul the criminal justice system for the first time in over 70 years, it is essential for the Public Prosecution Service, the Serious Crimes Investigation Agency, and the police to establish a system that prevents harm to the public. The President's question was aimed at preparing for all possible scenarios that may arise under the new legal framework."