Where Is Real Estate Policy Headed? President Lee Says "Willing to Bear Difficulties" in Closing Remarks

[Anchor]

Today (July 23), President Lee Jae-myung held a town hall discussion on real estate policy. President Lee pointed out that the preference for a "smart single home" has "caused serious problems in our society." He also stated that if property holding taxes had been normalized in the past, housing prices would not have risen to this extent, emphasizing that the degree and scope of strengthening holding taxes are crucial.

First, reporter Park Ye-rin reports.

[Reporter Park Ye-rin]

During the "National Town Hall Meeting on Real Estate Policy" broadcast live this morning, President Lee Jae-myung responded as follows to an attendee's question regarding the government's real estate policy objectives.

[Yang Ji-young / Private Real Estate Expert: Is the goal market stabilization, lowering housing prices, or regulating gap investments and owners of multiple homes?]

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

President Lee added that the goal is not to control prices while ignoring market order, but to prevent housing prices from being formed distortedly due to abnormal demand and supply.

Regarding the phenomenon of holding just one high-priced apartment—the so-called "smart single home"—he pointed out, "It has caused serious problems in our society," adding, "In some ways, it created an opportunity to speculate efficiently."

[President Lee Jae-myung: We said let's respect and protect single-home owners per household, but because we treated them all the same regardless of whether the home was expensive or cheap, people ended up purchasing one property efficiently to enjoy investment gains.]

Discussions also touched upon what price threshold should be used if the property holding tax burden on ultra-high-priced homes is increased.

[Chung Se-eun / Professor of Economics at Chungnam National University: So about twice the national average. (Should homes over 1 billion won be considered ultra-high-priced?) Yes, that's correct.]

Counterarguments against strengthening the tax itself were also raised.

[Kim In-man / Real Estate YouTuber: If you hit ultra-high-priced homes, will apartments under 1.5 billion won stabilize? If you target non-residents and multiple-home owners, they will ultimately pass that burden onto tenants...]

President Lee stated that the degree and scope of strengthening holding taxes are crucial, adding that because the housing price issue could be fatal if it erupts, preparations must be made even if it incurs political costs.

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

President Lee also raised options such as capping the number of times or the total amount of capital gains tax deductions for single-home owners, noting that granting unlimited tax relief to single-home owners appears problematic.

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

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[Anchor]

President Lee Jae-myung also emphasized the need to overhaul jeonse (lump-sum deposit) loans. He stated that overly accessible jeonse loans were a primary cause of surging home prices and that it is time to make adjustments. Regarding supply measures, he promised a swift approach, such as shortening the construction period for 3rd-generation new towns.

Reporter Kang Cheong-wan continues.

[Reporter Kang Cheong-wan]

At today's real estate forum, President Lee Jae-myung mentioned the need for policy adjustments, stating that overly accessible jeonse loans led to surging home prices and even jeonse fraud.

[President Lee Jae-myung: While jeonse loans serve as a support policy for housing stability among working-class people, they have also become a primary cause of skyrocketing housing prices. I think it is now time to adjust this.]

In particular, he asked the attendees whether jeonse loans should really be granted to individuals who already own homes.

[President Lee Jae-myung: Please raise your hand if you think they shouldn't be provided.]

However, he added a proviso that "pinpoint support" is necessary for the housing needs of young adults, newlyweds, and working-class people who genuinely require jeonse loans.

Discussions also grew heated regarding the realities of supply measures.

[Go Jong-wan / Private Real Estate Expert: Supply shortage is the biggest cause. There are concerns that in three or four years, crazy housing prices and crazy jeonse rates could recur...]

[Chae Sang-wook / Private Real Estate Expert: Details on how many private rental housing units will be built during the five years of the Lee Jae-myung administration, in which regions, and of what types do not exist at all.]

[President Lee Jae-myung: It's not that we are indifferent; existing systems do exist in their own right. But they probably aren't working well. The fundamental problem is that there is almost no land available for new construction.]

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

[President Lee Jae-myung: Well, we will have to discover and develop those.]

While expressing frustration that supply limits are clear due to the difficulty of finding building sites in Seoul, President Lee promised a push for speed, including shortening the construction period for 3rd-generation new towns.

[President Lee Jae-myung: Since it was said that (the construction period for 3rd-generation new towns) takes over 60 months, we are currently conducting internal reviews to reduce that to less than half.]

Regarding the difficulty of securing new building sites, President Lee also mentioned that he would tour the Seoul metropolitan area directly by helicopter, adding that the government is uncovering as much additional land as possible to increase housing supply.

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

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[Anchor]

Through this real estate town hall, the policy of strengthening property holding taxes on ultra-high-priced homes was reaffirmed. The direction was set toward differentiating tax burdens, such as granting exceptions to single-home owners who temporarily do not reside in their property due to job or education reasons. The government plans to announce a tax reform plan including real estate tax revisions soon.

Reporter Jeon Hyeong-woo reports.

[Reporter Jeon Hyeong-woo]

At today's forum, the direction was clearly established: tax burdens will not be increased for single-home owners who live in their homes for residential purposes, but burdens will be raised if the property is for investment purposes or is an ultra-high-priced home.

In particular, President Lee Jae-myung suggested an exception clause for non-resident single-home owners, noting that if there are circumstances requiring temporary non-residence, it cannot be viewed as an investment purpose.

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

However, for ultra-high-priced homes, tax burdens are expected to increase regardless of actual residency.

The threshold frequently mentioned by panel participants and in online comments 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, including Mapo and Seongdong.

If the threshold is set at 5 billion won, it would apply to about 30,000 households—or 2% of all apartments in Seoul—mainly targeting 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 the tax rate on ultra-high-priced homes is raised and the tax burden cap (currently capped at 1.5 times the previous year) is increased, 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, but the holding tax burden is expected to vary significantly depending on whether the ultra-high-priced threshold is set at 3 billion or 5 billion won.

[Woo Byung-tak / Senior Expert at Shinhan Premier Pathfinder: For areas along the Han River Belt, taxes could be 1.3 to 1.5 times higher than the previous year. For ultra-high-priced homes specifically, there seems to be a possibility that the existing tax burden cap could be raised to two or even three times.]

The government plans to announce a tax reform plan late this month or early next month, containing the price threshold for ultra-high-priced homes, the extent of tax rate increases, and whether transaction taxes will be lowered.

(Video Editing: Chae Cheol-ho)

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[Anchor]

Joining me is reporter Kang Min-woo, who covers the Blue House.

Q. What is the overall assessment of the town hall?

[Reporter Kang Min-woo: While taking the format of listening to public opinions, I would say it clearly revealed the real estate policy goals of the Lee Jae-myung administration—specifically its direction and willingness to strengthen taxation and regulations. In response to the question about policy goals, President Lee said it was not about artificially lowering housing prices, but he emphasized "normalizing the abnormal." This is interpreted as emphasizing the use of taxation, including strengthening holding taxes on ultra-high-priced homes, as well as curbing speculation. Notably, President Lee was seen applauding only once during the forum, when a student from a regional national university suggested strengthening the Comprehensive Real Estate Holding Tax, curbing unearned income through capital gains clawbacks, and using those revenues to support local infrastructure and the youth 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 "bear the difficulties." While acknowledging that discontent is inevitable, he expressed strong policy determination, saying opportunities like this do not come often.]

Q. Are there concerns that the town hall leaned too heavily toward regulation?

[Reporter Kang Min-woo: Since the attendees were selected by the Blue House, there is a view that opinions overall favored strengthening holding taxes and regulations. However, quite a few participants expressed concerns or opposing views. In particular, some worried about side effects such as holding taxes being passed down to tenants, as well as concerns that regulations on multiple-home owners could shrink the private rental business, leading to a drop in jeonse supply and worsening housing conditions. There were also comments 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 policies. On the other hand, the People Power Party sharply criticized it as a staged public relations show where the outcome was predetermined, pointing out that there was no mention of the controversies surrounding President Lee's sale of his Bundang home and the creation of a mortgage right worth around 1.7 billion won.]
※ Please note: This article was translated by AI and may contain errors.