The Democratic Party of Korea (DPK) welcomed the government's real estate tax reform plan from the perspective of tax normalization today (August 4), while also stating that it will closely examine the details during the National Assembly's deliberation process and make supplementary adjustments if necessary.

With the new holding and transfer taxes set to take full effect starting in 2028—the year of the general election—following the legislative process, the conservative opposition is launching offensives calling it a "tax nuclear bomb." As a result, the ruling party is showing a cautious stance while monitoring the potential impact on public sentiment in the Seoul metropolitan area, which is extremely sensitive to real estate issues.

During the floor countermeasures meeting today, Acting Leader and Floor Leader Han Byeong-do evaluated that "the goal of this tax reform plan is tax normalization for growth and people's livelihoods," adding, "The DPK will provide robust support during the National Assembly's deliberation process and refine the parts that need supplementing with greater precision."

Policy Committee Chair Han Jeong-ae also stated, "Real estate tax reform is a fair and rational process that protects actual home-buyers and corrects distorted structures," and added, "We greatly welcome the fact that it is designed so that the holding tax burden for the vast majority of single-home resident owners will either ease or not increase."

At the same time, she noted, "During the National Assembly's deliberation on tax laws, we will listen to various voices from the field and thoroughly review the plan based on specific cases and statistics," and "We will carefully examine and supplement the plan during the parliamentary deliberation process to minimize problems or impacts that could stem from sharp fluctuations in tax burdens."

This stance by the DPK leadership appears to take into account the concerns being raised within the party, centered mainly around lawmakers representing districts in Seoul.

A DPK lawmaker representing a district in northern Seoul said in a phone call today, "While it is meaningful that the government presented a direction centered on ultra-high-value homes to make actual residency an important standard for taxation, there are also concerns that prices could rise and properties could be withheld from the market while supply remains insufficient."

The lawmaker emphasized, "It is important to significantly accelerate housing supply and present a vision to citizens," adding, "The party needs to examine these concerns, communicate, and make supplementary improvements with the government."

A lawmaker whose constituency is in southern Seoul's Gangnam area explained, "Given that the standards have been revised to focus on ultra-high-value homes, the shock to the market will likely not be massive," but noted, "Financial and supply policies also need to be reviewed together."

Lawmaker Kim Young-ho, who represents the Seodaemun-gu B constituency in Seoul, appeared on SBS Radio's "Kim Tae-hyun's Political Show" today and said, "The ruling party must persuade the government to craft a tax reform plan that the public can accept and understand," adding, "We must shape it and persuade the government once again."

On the other hand, some within the party voiced opinions that this real estate tax reform plan, which focuses exclusively on ultra-high-value homes, falls short.

A DPK lawmaker from the Seoul region said, "Since South Korea's holding tax is extremely low, there is a need to normalize it," and added, "The current tax rates are a bit ambiguous, so I think they probably need to be raised further."

Parties in the broader ruling bloc, such as the Rebuilding Korea Party and the Progressive Party, also reacted by saying, "It fell short of expectations" and "It seems difficult to expect an effect of stabilizing the real estate market."

Meanwhile, DPK lawmakers representing districts in Seoul are scheduled to hold a meeting on August 6 to respond to real estate policies.

Hosted by the Seoul Metropolitan Chapter of the DPK, the meeting is expected to discuss housing supply policies and financial regulations alongside the real estate tax reform plan.

(Photo: Yonhap News)