3 Gangnam districts angry with ruling Saenuri Party

Residents in three upscale districts in Seoul’s Gangnam area have started criticizing the government and the ruling party, demanding revocation of the “comprehensive real estate tax,” while the National Assembly is actively debating measures to shore up the realty market. The districts are Gangnam, Seocho and Songpa.

The coalition of chairmen of councils of apartment complexes aimed at repealing the comprehensive real estate tax in three Gangnam districts reportedly sent a letter demanding revocation of the comprehensive real estate tax, enclosed with files of signatures collected from residents, to ruling Saenuri Party Chairman Hwang Woo-yea in end-October.

In the letter, the coalition said, “The comprehensive real estate tax is the Roh Moo-hyun administration’s stern punishment against forces supporting the Saenuri Party.” The letter went on to read, “Majority of residents in the three Gangnam districts are people aged 60 or older relying on pension or severance pay for living after retirement without having any other income source. Many of them have turned into the ‘house poor’ who cannot afford to seek grievance just because they are residing in the Gangnam area.” On Deputy Prime Minister and Finance Minister Hyun Oh-seok`s comments that the government would consider measures to reshuffle realty ownership taxes such as the real estate tax and the comprehensive real estate tax at a meeting of economy-related ministers in August, hinting at the possibility to raise the comprehensive real estate tax rate, the coalition expressed discontent in the letter, saying, “Is it true that Hyun a prime minister named by the Saenuri Party?”

“Amid a flurry of requests seeking the revocation of the comprehensive real estate tax, the party has been making many attempts as well,” said a source at the Saenuri Party. “Though we are collecting opinions through public hearings, little progress has been made due to diverse opinions such as balanced regional development.”

In the three Gangnam districts where many residents are payers of comprehensive real estate tax, civil complaints demanding the revocation of the tax have been constantly filed. Since the tax introduced in 2005, there have been disputes between those who criticize the comprehensive real estate tax as "wealth tax," and those who claim that it is needed to enhance equity in taxation and to achieve balanced regional development. Na Seong-rin, vice chairman of Saenuri Party’s policy committee, sought the tax revision to combine the comprehensive real estate tax, a state tax, and the wealth tax, a local tax, to create a comprehensive wealth tax, but no significant progress has been made thus far.