[Exclusive] Democratic Party's Kim Byung-wook from 'Gangnam and Bundang Gatherings' Proposes "LTV and Comprehensive Real Estate Tax Relief for Single-Homeowners"

[Asia Economy Reporter Park Cheol-eung] Within the Democratic Party of Korea, voices have emerged calling for the easing of loan-to-value (LTV) regulations and comprehensive real estate tax (종부세) burdens specifically for non-homeowners and single-homeowners as part of real estate stabilization measures. While speculation by multi-homeowners should be eradicated, there is an argument that excessive real estate regulatory measures, which are out of touch with local public sentiment centered around areas like Gangnam in Seoul and Gyeonggi/ Bundang, need to be revised.

On the 3rd, Democratic Party lawmaker Kim Byung-wook (Gyeonggi Seongnam Bundang-eul) stated, "At a meeting of lawmakers from regions including Gangnam, Yangcheon, Yeongdeungpo, Mapo in Seoul, and Bundang in Gyeonggi, there is a consensus that regulations on non-homeowners and single-homeowners should be partially eased," adding, "We have drafted specific easing plans focusing on LTV and 종부세, and after discussing them in this meeting, we plan to propose them to the party."

Lawmaker Kim pointed out, "The December 16 real estate measures are criticized for blocking even genuine demand from non-homeowners or single-homeowners due to excessive regulations," emphasizing this point.

The core proposal is to ease LTV regulations to around 40% for non-homeowners or single-home genuine demanders within speculative areas and speculative overheating districts. The government, through the December 16 measures last year, lowered the existing LTV from 40% to 20% for homes priced over 900 million KRW and completely banned mortgage loans for homes priced over 1.5 billion KRW.

Regarding 종부세, a proposal was made to reduce the burden by increasing the long-term holding special deduction rate exclusively for single-homeowners. The government, in the December 16 measures, raised age-based deduction rates by 10 percentage points each to ease the tax burden on the elderly, and the proposal suggests further expanding the tax credit for single-homeowners based on holding periods to 50-90%. Additionally, it includes establishing tax credits based on residence periods, expanding the total deduction limit to 90%, and adjusting the rate of increase in tax burden compared to the previous year.

Kim said, "As of January this year, the median price of apartments in Seoul has already surpassed 900 million KRW," adding, "If regulations block those who have the ability to repay principal and interest, ultimately only those with sufficient cash can buy homes. While eradicating speculation by multi-homeowners is natural, completely blocking the desire to own a home is out of step with public sentiment." He also noted that the government continues loan policies such as first-time homebuyer loans and the Bogeumjari Loan for non-homeowners or single-home genuine demanders.

Regarding 종부세, the proposal background includes the fact that tax burden factors have increased significantly due to not only tax rate hikes but also housing price increases, the rise in official housing price realization rates, and the increase in the fair market value ratio.

Kim said, "No matter how good a policy is, if it causes a sudden increase in tax burden, acceptance on the ground will inevitably decline," adding, "It is necessary to revise and supplement the policy to achieve its goals while obtaining residents' consent."