Public opinion has emerged calling for restrictions on excessive benefits for homeowners of high-value properties, suggesting that homes valued at over 3 billion won should be classified as high-value properties.
Lee Hyung-il, Deputy Minister of Finance, presented the results of public feedback during a real estate policy forum chaired by President Lee Jae-myung. The government had previously opened both offline discussions and online channels to gather public suggestions.
During the forum, participants expressed the need to limit excessive benefits for high-value homeowners. There were also calls to set the threshold for high-value properties at 3 billion won. Conversely, online discussions revealed differing opinions, with some advocating for a relaxation of the preference for owning a single high-value property, while others cautioned against taxing unrealized gains, which could be passed on to tenants.
Regarding the criteria for comprehensive real estate tax, similar views were expressed both at the forum and online. Deputy Minister Lee explained, "There was a consensus at the forum and online that it would be preferable to eliminate the differential based on the number of homes and instead tax based on the total value of the properties owned."
There were also suggestions to differentiate the property tax for non-resident homeowners, advocating for stricter residency requirements and increased tax burdens for those not residing in their properties. Online opinions varied, with some supporting this approach while others argued that distinguishing between genuine demand and speculation based on residency status is challenging, and that there are unavoidable circumstances for residency.
Debate also arose regarding the relationship between property taxes and transaction taxes. Some argued that property taxes should be prioritized, suggesting a reduction in capital gains tax to account for the potential locking up of inventory. Opponents countered that capital gains should be appropriately taxed to ensure equity with earned income.
On the topic of reforming the long-term capital gains tax exemption, participants at the forum suggested reducing benefits for non-residents and establishing limits on the exemption rate, considering the high exemption rates. Online discussions raised concerns that reducing these exemptions could lead to inventory lock-up, serving as an inflationary pressure.
Finally, there were conflicting opinions regarding tax relief for elderly individuals relocating to rural areas. Some argued that retired seniors should receive tax relief when moving to the countryside, while others expressed concerns that providing separate tax incentives could lead to tax evasion.
Additionally, proposals were made during the forum to convert unused urban land and non-residential sites into residential areas to increase housing supply. There were also calls for the government to enhance the feasibility of private redevelopment and reconstruction projects by increasing floor area ratios and rationalizing public obligations.
In terms of housing finance, opinions diverged on whether to use total loan limits as a temporary measure or to maintain them for housing market stability and household debt management.
Deputy Minister Lee noted, "Regarding loan regulations for genuine demand, there were suggestions to ease restrictions for young people with insufficient income or assets, while others argued for maintaining regulations due to concerns over rising housing prices."
* This article has been translated by AI.
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