Deputy PM nominee says he will normalize real estate tax system

Deputy Prime Minister and Finance Minister nominee Choo Kyung-ho said he would reform the real estate tax system, such as comprehensive real estate holding tax and transfer tax. He also implied lowering corporate tax with a current maximum rate of 25 percent.

“It is necessary to normalize the overuse of the real estate tax system to manage the real estate market and reform it based on the basic taxation principles to stabilize the market,” said Choo in his response submitted to the National Assembly on Tuesday regarding the real estate tax system ahead of a confirmation hearing to be held on May 2. “Detailed plans to reform the tax system and implementation schedule will be decided based on the market situation,” he added.

“The Moon Jae-in administration overused the real estate tax system to manage the real estate market, which goes against the basic taxation principles,” he said on comprehensive real estate holding tax. “As a result, the tax burden of those who own one or more homes drastically increased,” the nominee said. “I will bring the tax burden to appropriate levels and normalize the overuse.”

“The current heavy taxation should be normalized in order to lower excessive tax burden to appropriate levels and stabilize the real estate market,” said Choo regarding the heavy taxation of transfer tax for multi-homeowners. The presidential transition committee decided to temporarily exempt heavy transfer tax for multi-homeowners for a year from May 11. Currently, those who own two or three homes in areas subject to adjustment have to pay 20 or 30 percentage points, respectively, on top of the basic transfer tax rate of six to 45 percent.

The nominee also said that President-elect Yoon Suk-yeol’s pledge to integrate real estate holding tax and property tax should be carried out with a mid- to long-term perspective in consideration of other countries’ cases and property taxation principles.

Choo also plans to reform the corporate tax system, which was raised during the Moon administration. “The current corporate tax system should be reexamined for its high maximum rate and complicated tax brackets,” he emphasized. It is believed that he will lower the maximum rate of 25 percent and simplify the current four brackets for corporate tax.


Teuk-Gyo Koo kootg@donga.com