Real Estate Tax: Korea President’s Office Admits Low Rates

On the 15th, Presidential Office Policy Director Kim Yong-beom said about real estate measures, “We also need to think about the tax system. It is true that the property tax is low,” and “It is wrong to say that the tax system cannot be touched.”

Policy Director Kim appeared on YouTube this afternoon and said, “We need to seriously review the overall acquisition, possession, and transfer tax system.”

Director Kim called this plan ‘normalization of the real estate tax system’ and said, “There will be a direction to strengthen the property tax and facilitate transactions.” He continued, “Compared to the global average, the tax burden is low,” and “Policies for real estate stability and housing welfare must encompass both taxation and supply.”

Regarding supply measures, Director Kim said, “Because supply occurs in a 3-4 year cycle, a short-term recovery in demand is bound to stimulate prices. With the stock market up 40%, real estate demand is also restored,” adding, “Therefore, we have no choice but to use unconventional measures to suppress demand.” He said, “Supply takes time, but we must be prepared to do it,” and added, “We are also discussing establishing a new organization dedicated to supply.”

In response to criticism about whether there is a will to supply, Director Kim said, “Even if we decide to supply unconventionally, it will be difficult within a year. So we need measures to suppress demand right now.” He said, “Reconstruction involves intertwined interests and requires a socially sophisticated approach,” and added, “Organic cooperation with local governments such as Seoul City and Gyeonggi Province is important.” Director Kim continued, “There is land, but it is not easy to coordinate because it is a place where capital profits are concentrated. It’s not that we don’t do it because we don’t know, it’s that we ‘can’t’ because it is not easy to coordinate interests. Still, we have to do it.”

The government also included the ‘real estate tax rationalization policy’ in the housing market stabilization measures jointly announced by related ministries on this day. Adjustment of ownership tax and transaction tax was specified as a specific content of tax rationalization. This means that if the real estate market continues to overheat, we will look into ways to increase ownership taxes such as comprehensive real estate tax and property tax and lower transaction taxes to increase transaction volume.