Where Is Real Estate Policy Headed? President Lee Willing to "Endure Hardships" in Closing Remarks

[Anchor]

Today (July 23), President Lee Jae-myung hosted a public debate on real estate policy. President Lee pointed out that the trend of favoring a "smart single home" (a single high-value property) has "caused serious problems in our society." He stated that housing prices would not have risen this much if holding taxes had been normalized in the past, emphasizing that the degree and scope of strengthening holding taxes are important.

First, reporter Park Ye-rin reports.

[Reporter Park Ye-rin]

At the "National Public Debate on Real Estate Policy," which was broadcast live this morning, President Lee Jae-myung responded as follows when asked by a participant about the government's real estate policy objective.

[Yang Ji-young / Private Real Estate Expert: Is the goal market stabilization, lowering housing prices, or regulating gap investment or multiple homeowners?]

[President Lee Jae-myung: To put my thoughts simply, it is not to artificially lower prices.]

President Lee added that rather than ignoring market order to control prices, the goal is to prevent housing prices from forming incorrectly due to abnormal demand and supply.

Regarding the phenomenon of owning just one high-priced apartment, dubbed a "smart single home," he noted, "It has caused serious problems in our society," adding, "It has, in a way, created an opportunity to speculate efficiently."

[President Lee Jae-myung: Because we respected and protected single-home households while treating them equally regardless of whether the property was expensive or cheap, people ended up efficiently buying one home to enjoy investment profits.]

Discussions were also held on what price threshold should trigger higher holding tax burdens on ultra-high-priced homes.

[Jeong Se-eun / Professor of Economics at Chungnam National University: So up to about twice the national average. (Shall we consider homes over 1 billion won as ultra-high-priced?) Yes, that is correct.]

Counterarguments against strengthening taxes itself were also raised.

[Kim In-man / Real Estate YouTuber: If we hit ultra-high-priced homes, will apartments under 1.5 billion won stabilize? If we hit non-resident single homeowners and multiple homeowners, they will eventually end up hitting tenants...]

President Lee said that the degree and scope of strengthening holding taxes are important, adding that since the housing price issue would be fatal if it bursts, preparation must be made even at the risk of political fallout.

[President Lee Jae-myung: If holding taxes had been normalized in the past, prices would not have risen this much.]

President Lee also brought up measures such as limiting the number of times or the total amount of capital gains tax exemptions granted to single homeowners, saying that providing unlimited tax relief also appears problematic.

(Video: Jeong Sang-bo and Ha Ryung | Video Editing: Wi Won-yang)

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[Anchor]

President Lee Jae-myung also emphasized the need to revamp jeonse (lump-sum deposit) loans. He stated that overly accessible jeonse loans are a major cause of surging house prices and that it is time for policy adjustments. Regarding supply measures, he promised a swift drive, including shortening the construction period for the 3rd generation new towns.

Reporter Kang Cheong-wan continues.

[Reporter Kang Cheong-wan]

At today's real estate debate, President Lee Jae-myung mentioned the need for policy adjustments, noting that because jeonse loans are too easy to obtain, housing prices have skyrocketed and even jeonse fraud has emerged.

[President Lee Jae-myung: While jeonse loans serve as a support policy for housing stability for ordinary citizens, they have also become a primary cause of surging house prices. I think it is now time to make adjustments.]

In particular, he asked the attendees for their opinions on whether jeonse loans should really be granted to individuals who already own homes:

[President Lee Jae-myung: Raise your hand if you think we should not grant them.]

However, he added a proviso that "pinpoint support" remains necessary for young people, newlyweds, and low-income citizens who genuinely need jeonse loans for housing.

The debate also grew heated regarding the reality of supply measures.

[Go Jong-wan / Private Real Estate Expert: A supply shortage is the biggest cause. There is a concern that in 3 to 4 years, crazy house prices and crazy jeonse rents could recur...]

[Chae Sang-wook / Private Real Estate Expert: There are no details at all on how many private rental housing units will be built, in which regions, or of what type during the five years of the Lee Jae-myung administration.]

[President Lee Jae-myung: It is not that we are indifferent, and existing systems do exist in their own way. But they probably aren't working well. The fundamental problem is that there is hardly any land available for new construction.]

[Chae Sang-wook / Private Real Estate Expert: Within urban areas, there is not only residential land; there is plenty of non-residential land, idle sites, and land that can undergo rezoning.]

[President Lee Jae-myung: Well, we will have to uncover such sites.]

While President Lee lamented that it is difficult to find building sites in Seoul, posing clear limits to supply, he also promised a swift approach, such as shortening the construction period for the 3rd generation new towns.

[President Lee Jae-myung: Since the construction period for the 3rd generation new towns is said to take 60-plus months, I am sharing that we are currently conducting internal reviews to reduce it by more than half.]

Regarding the difficulty of securing new housing sites, President Lee also mentioned that he plans to personally inspect the Seoul metropolitan area by helicopter, adding that the government is doing its best to uncover additional sites to expand housing supply.

(Video: Jeong Sang-bo and Ha Ryung | Video Editing: Nam Il)

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[Anchor]

Through this real estate debate, the policy direction of strengthening holding taxes on ultra-high-priced homes was reaffirmed. The direction was set toward differentiating tax burdens, such as making exceptions for those who temporarily do not reside in their homes due to work or education. The government plans to announce a tax reform plan including real estate taxation soon.

Reporter Jeon Hyeong-woo reports.

[Reporter Jeon Hyeong-woo]

At today's debate, a clear direction emerged: tax burdens will not be increased for single homeowners living in their properties for residential purposes, but will be raised for investment-driven or ultra-high-priced homes.

In particular, President Lee Jae-myung hinted at an exception clause for non-resident single homeowners, questioning whether temporary non-residence due to circumstances should really be viewed as investment-driven.

[President Lee Jae-myung: If someone is temporarily non-resident due to other circumstances but the property is for residential use, shouldn't that be treated the same as actual residence?]

However, for ultra-high-priced homes, the tax burden is expected to increase regardless of actual residency.

The threshold frequently cited by debate participants and online commentary was a market value of 3 billion won.

Under this threshold, about 166,000 households would be affected, extending to apartments along the Han River belt, such as Mapo and Seongdong.

If the threshold is set at 5 billion won, it would affect around 30,000 households—about 2% of all apartments in Seoul—concentrated mainly in the three Gangnam districts.

For an apartment in Banpo with a market price of 5.7 billion won and an officially assessed value of 5.5 billion won, this year's holding tax is around 38 million won.

If tax rates on ultra-high-priced homes are raised and the tax burden cap (currently set at a maximum of 1.5 times) is also increased, property holding taxes could more than double.

An apartment in Daechi-dong with a market value of 3.6 billion won and an assessed value of 3.2 billion won pays around 15 million won this year, and its holding tax burden is expected to vary significantly depending on whether the ultra-high-priced home threshold is set at 3 billion or 5 billion won.

[Woo Byung-tak / Expert Committee Member at Shinhan Premier Pathfinder: For areas in the Han River belt, an increase of about 1.3 to 1.5 times compared to the previous year [can be expected]. For ultra-high-priced homes specifically, there appears to be a possibility that the existing tax burden cap could also be raised to two or even three times.]

The government plans to announce a tax reform plan late this month or early next month, detailing price thresholds and tax rate increases for ultra-high-priced homes, as well as whether transaction taxes will be lowered.

(Video Editing: Chae Cheol-ho)

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[Anchor]

We are joined by reporter Kang Min-woo, who covers Cheong Wa Dae.

Q. What is your overall assessment of the debate?

[Reporter Kang Min-woo: While taking the format of listening to public opinions, it revealed the real estate policy goals—meaning the overall direction—of the Lee Jae-myung administration, particularly its intent to strengthen taxation and regulations. In response to the question regarding policy goals, President Lee said it was not about artificially driving down housing prices, while emphasizing 'normalizing the abnormal.' This is interpreted as emphasizing the use of taxation, including strengthening holding taxes on ultra-high-priced homes, to curb speculation. In particular, President Lee was the only one to applaud a remark by a student at a regional national university who asked to strengthen the Comprehensive Real Estate Tax, retrieve unearned income through capital gains clawbacks, and use those funds to support local infrastructure and the younger generation. He also mentioned several times that he is well aware of the political volatility and tax resistance surrounding real estate policy and tax hikes, stating in his closing remarks that he would 'endure hardships.' Saying that dissatisfaction is inevitable but adding that such opportunities do not come often, he demonstrated a strong policy commitment.]

Q. There are criticisms that the debate leaned heavily toward regulation?

[Reporter Kang Min-woo: Since the attendees were selected by Cheong Wa Dae, there is a view that opinions overall leaned toward strengthening holding taxes and regulations. However, quite a few participants expressed concerns or opposing views. In particular, there were concerns about side effects where stronger holding taxes might end up being passed on to tenants, as well as opinions that regulating multiple homeowners could shrink private rental businesses, leading to a reduction in jeonse listings and deteriorating housing conditions. There was also an opinion that owners of ultra-high-priced homes should not be demonized.]

Q. What are the reactions from the political sphere?

[Reporter Kang Min-woo: First, the Democratic Party evaluated it as an expression of strong determination to listen to the public's voice and reflect it in policy. On the other hand, the People Power Party criticized the event, pointing out that there was no mention at all regarding controversies surrounding President Lee's sale of his residence in Bundang and the establishment of a collateral mortgage in the 1.7 billion won range. They harshly slammed it as a predetermined debate designed merely to build justification, calling it a public opinion manipulation show.]
※ Please note: This article was translated by AI and may contain errors.