Cheong Wa Dae said it views President Donald Trump’s remarks about raising tariffs as stemming from U.S. dissatisfaction over delays in passing a “special act for strategic investment management” with the United States, and said it will explain to Washington that parliamentary procedures are required.
Kim Yong Bum, Cheong Wa Dae’s senior presidential secretary for policy, told a briefing at Chunchugwan on Monday that Trump’s comments could be interpreted as frustration that implementation of a tariff agreement has been slowed because the bill has not been processed quickly in the National Assembly.
Kim said the U.S. side wants investment projects based on a strategic investment memorandum of understanding to begin soon, adding that there has been communication that once the law passes and procedures move quickly, the two sides could discuss the projects.
He said the government will more fully explain in February that legislation is needed and will detail to the U.S. side the efforts being made with the National Assembly.
Kim again stressed that National Assembly ratification is not required for the investment agreement, saying there was no disagreement between South Korea and the United States on that point when the deal was reached.
On President Lee Jae Myung’s decision to end a temporary suspension of heavier capital gains taxes for owners of multiple homes, Kim said the measure will expire as previously announced, calling it a principle for how the administration will operate going forward.
He said the government is reviewing whether to allow a set period for transactions to be completed after contracts are signed on May 9.
A Cheong Wa Dae official said the suspension will end, but the government will closely monitor market conditions and design detailed measures to avoid unreasonable outcomes as the heavier tax rates take effect.
Lee wrote on X on Thursday that “even a single home can be different depending on circumstances,” and said that if tax rules must be adjusted, it may be fair to treat nonresidential and residential homes differently. He added that he is not considering any extension of the multi-home capital gains tax exemption set to expire May 9.
Lee also wrote that not only multiple homes but also a single nonresidential home used for investment or speculation can look undeserving of tax breaks simply for being held long term, and said the long-term holding deduction can discourage listings and encourage speculation. He added that he is not changing the tax system immediately, but said the issues are worth debating.
If the suspension is not extended, in designated regulated areas, owners of two homes would face an additional 20 percentage points in tax rates and owners of three homes an additional 30 percentage points, and they would no longer be eligible for the long-term holding deduction.
The basic tax rates were introduced under the Moon Jae In administration in 2021, but were suspended through an enforcement decree revision when the Yoon Suk Yeol administration took office on May 9, 2022, and the suspension has been extended annually.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.