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Gross real estate policy overturned overnight

Posted April. 28, 2021 07:28,   

Updated April. 28, 2021 07:28


The Democratic Party of Korea held the first meeting of the real estate special committee on Tuesday but was not able to determine its stance on the main concern of easing gross real estate tax. The special committee said it will announce relevant measures in May but put off necessary discussions. The ruling party actually announced on Monday that there would be no discussion on gross real estate tax for a while. Within just a few days, they went from easing the tax to holding off a review, then to postponing again. There is criticism that the committee members are swayed by hard-liners close to President Moon Jae-in, calculating political gains and losses.

The special committee said it keeps all options open to examining the policy and chose easing of loan regulations and tax system for rental business operators as priority topics. “Gross real estate tax will be discussed with very low priority at the special committee,” Hong Ihk-pyo, the head of the Democratic Party’s policy committee, said during an interview with a radio program. It seems like an attempt to gauge the public’s reactions with measures, such as easing loans for working-class people, while delaying discussions on gross real estate tax.

It was also reported that Yoon Hu-duk, a member of the Democratic Party and the leader of the Strategy and Finance Committee, proposed on Monday to reduce the share of people subject to gross real estate tax to one percent, or about 500,000 people. He also added that if the number exceeds one million people, the party won’t be able to win in the argument with the frame of raising taxes on the rich at the next presidential election. He even reportedly said that “technical” measures should be explored. Kim Byung-wook, a member of the Democratic Party, proposed a bill to expand those subject to the reduction of gross real estate tax. Even within the ruling party, the special committee, the standing committee, and individual members are voicing different opinions.


While a party can have diverse opinions within itself, the recent confusion of the ruling party seems to be attributed to being swayed by pro-President Moon hard-liners. The Democratic Party apologized for the failure of real estate policy and promised to remedy and revise the policy ahead of by-elections. Even after its loss of by-elections, there was a strong voice calling for policy change, including easing gross real estate tax for single homeowners. However, the hard-liners are quickly gaining power. The argument for reducing gross real estate tax is dealt with as part of election strategy with terms, such as tokenistic or technical.

Reducing gross real estate tax for single homeowners is protecting those who have a single house for their own use, such as retirees who now experience heavier tax burdens due to skyrocketing housing prices. The culprit behind soaring housing prices is the ruling party of the current administration. Gross real estate tax should be examined from the perspective of common sense, rather than as a power struggle within the party or strategy for a presidential election. The real estate special committee will not be able to avoid public criticism if they put forward measures designed to simply show off.