[Anchor]

It has been a week since the government announced its tax revision plan, but the backlash remains fierce. To see the intended effects of the revision, a complicated situation has unfolded where exceptions to existing regulations are inevitably piling up.

Reporter Lee Seong-hoon has the details.

[Reporter]

An apartment complex in Songpa-gu, Seoul.

While some homeowners have shown a willingness to put their properties on the market following the announcement of the tax revision plan, various constraints make actual transactions difficult to come by.

[Real Estate Agent in Songpa-gu, Seoul: You could say that homes with a lot of lease period remaining cannot be sold even if the sellers want to sell them. There are many such cases. You can consider that there are many people who want to sell but cannot due to those circumstances.]

In this tax revision plan, the government laid out a policy to temporarily lower the heavy capital gains tax rate for owners of multiple homes in order to increase housing supply on the market.

However, in land transaction permission zones—including all of Seoul and 15 areas in Gyeonggi Province—buyers are required to move in and live there directly within four months of obtaining permission.

As criticisms mounted that it is difficult to find buyers for homes with tenants whose lease periods still have a long way to go, the government is belatedly reviewing plans to extend the grace period for the mandatory actual residency requirement for tenant-occupied homes within permission zones until 2028.

This means tampering once again with the mandatory residency regulations, which had already been pushed back once until the end of the year ahead of the heavy capital gains tax imposition on multiple-home owners last May.

The same goes for single-home owners who do not reside in their properties.

Amid strong backlash against the residency recognition requirements, discussions are underway to additionally recognize cases such as looking after grandchildren and to expand the scope of the recognized residency period, which is currently set at three years.

The abolition of the carryover limit for general Individual Savings Accounts (ISAs) and the shortening of contract periods are also under review for complementary adjustments.

[Kim Woo-chol / Professor of Taxation, University of Seoul: It is a situation where exception clauses are being increased because of criticism, but if exceptions continue to pile up, it really becomes impossible to tell why this was done in the first place. Public trust in government policy is bound to be significantly undermined.]

With revisions and complementary measures having to be made successively just a week after the announcement, criticisms are rising that the preparation may have been inadequate.

The ruling party and government plan to gather opinions until the end of this month to make final adjustments to the tax revision plan.

(Video Editing: Kim Jong-mi, VJ: Jeong Han-wuk)