Lee Hyung-il: 'Residence-Centered Housing Market Is Government's Direction... Reasonable Demands Will Be Reflected'

Lee Hyung-il, nominee for Deputy Prime Minister and Minister of Economy and Finance, stated today (the 2nd) that "settling a residence-centered housing market is a certain direction the government has in mind."

Amid calls from some members of the ruling party to eliminate the distinction between non-residents and actual residents regarding the basic comprehensive real estate holding tax deduction for single-home owners, this is interpreted as a stance that the distinction providing benefits to actual residents should be maintained.

Nominee Lee made the remarks during a press conference held at the Government Complex-Sejong today, regarding the Cabinet's approval the previous day of a revision to the Comprehensive Real Estate Holding Tax Act that adjusted the basic deduction for non-resident single-home owners from the government's initial proposal of 900 million won to 1.2 billion won.

Regarding the intent behind the revision of the Comprehensive Real Estate Holding Tax Act, he said, "Rather than gaining effects by lowering the basic deduction for non-residents compared to the current level, it caused too much worry and concern in the market, so we decided to keep it as is, while providing benefits for actual residents and moving toward a residence-centered trend."

He added, "Aside from that, we will also maintain the current government proposal to convert the holding deduction into a residency deduction and submit it to the National Assembly."

However, he left open the possibility of further modifications during the parliamentary deliberation process.

Nominee Lee stated, "If there are specific discussions in the National Assembly and if there are rational parts, we plan to reflect them."

He pointed to the expansion of housing supply as the core of real estate market stabilization.

"For the real estate market to stabilize, the most fundamental and important thing is an increase in housing supply," he said, adding, "We will make efforts in that regard."

He cited interest rates and changes in demographic and household structures as variables for future housing price trends.

Nominee Lee noted, "Historically, when market interest rates rose, the real estate market faced difficulties," and added, "In a situation where the population is steadily decreasing, household division has been driving the market so far, but we need to think about how long that division will continue and what will happen to the housing market in the long run."

He emphasized, "Of course, everyone has a fundamental desire to own a home, and in that sense, increasing supply so that people can easily and well acquire homes is the government's policy," adding, "If we can increase housing supply, there is no reason to hesitate to provide tax and financial support."

Regarding the revelation that President Lee Jae-myung had instructed officials to prepare a system for mass purchasing houses for public housing ownership in preparation for a potential plunge in housing prices, he stated, "We are currently consulting with related ministries," and added, "It is not yet the stage to reveal specific details."

(Photo: Yonhap News)
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