The government and the Democratic Party have agreed to ease the tax burden on non-resident homeowners and transfer authority for redevelopment and reconstruction projects involving fewer than 500 units to local leaders. This initiative aims to reduce market uncertainty stemming from tax reforms while accelerating housing supply in the metropolitan area by decentralizing approval powers.
On August 23, the Democratic Party and the government held a high-level meeting at the Prime Minister's residence in Samcheong-dong, Seoul, to discuss real estate tax reform, housing supply strategies for the metropolitan area, and improvements to redevelopment and reconstruction systems.
The Democratic Party expressed concerns over the government's proposal to strengthen the comprehensive real estate tax burden on non-resident homeowners and requested that the government not differentiate between resident and non-resident homeowners when imposing the tax. However, it remains unclear whether the government will accept this request.
Park Sung-jun, the party's chief spokesperson, told reporters after the meeting, "The party strongly requested that the government not distinguish between resident and non-resident homeowners regarding the tax burden on single-homeowners." He added that both sides agreed on the need to broadly recognize non-resident homeowners who cannot reside in their properties due to unavoidable reasons such as work, children's education, or caring for parents.
The government's proposal to lower the basic exemption for non-resident homeowners from 1.2 billion won to 900 million won was also discussed as a potential area for revision. The Democratic Party believes that the tax burden will naturally increase due to rising property values, and thus, reducing the basic exemption should be carefully considered.
Park noted that since both sides agree on the need to alleviate the burden on non-resident homeowners, they expect to finalize supplementary measures before the Cabinet meeting on September 1 and the National Assembly submission on September 3.
Kim Min-seok, the Democratic Party leader, emphasized during the meeting that "the real estate tax reform and housing supply measures for the metropolitan area are of great public interest," urging careful consideration of the cascading effects on the rental market.
Kim also evaluated the proposal to convert the long-term capital gains tax special exemption into a long-term residency income deduction as a positive step toward strengthening a housing market order centered on actual residents.
In terms of housing supply, the government plans to transfer authority for redevelopment and reconstruction projects involving fewer than 500 units to local leaders.
Both the government and the party agreed on the need to distribute the currently centralized authority for small-scale redevelopment projects to local leaders to shorten approval periods and expedite projects that align with local conditions.
They will also review institutional improvements, including amendments to enforcement regulations, and explore ways to expand private sector participation in redevelopment and reconstruction projects.
Expanding housing supply for future generations, including young people and newlyweds, was also a key agenda item. The government and the party agreed to expedite approval processes to secure supply volumes early and reduce project durations, with plans to address necessary legislation during the regular National Assembly session.
The government will continue discussions with Seoul City regarding housing supply. Minister of Land, Infrastructure and Transport Kim Yoon-deok and Seoul Mayor Oh Se-hoon are scheduled to meet this week to discuss housing supply plans in central Seoul, including Yongsan Park.
Park noted, "There have been discussions regarding Yongsan Park, but it seems we are not at the stage to announce specific details yet," adding that a final decision has not been made.
* This article has been translated by AI.
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