Points to Revise in Real Estate Tax System Including Property Tax
Additional Regulations Suggested for Kimpo and Paju Due to 'Balloon Effect'
No 'Youth Harm' in Incheon Airport Regular Employment Conversion
[Asia Economy Reporter Moon Jiwon] Kim Hyunmi, Minister of Land, Infrastructure and Transport, emphasized the need to strengthen property holding taxes to establish a system that recovers real estate-related profits from multi-homeowners. Regarding areas such as Gimpo and Paju, where prices have recently surged, she stated that these places largely meet the quantitative regulatory criteria for designated adjustment areas, once again hinting that additional regulations are imminent.
Minister Kim appeared on KBS's 'Newsline' on the 29th to explain the June 17 real estate measures and said, "The government needs to address shortcomings in real estate taxation, including holding taxes. It is necessary to create a system that makes owning many houses burdensome and can recover investment gains."
Previously, the government attempted to revise the Comprehensive Real Estate Holding Tax Act during the last National Assembly session to raise tax rates by 0.1?0.3 percentage points for single-homeowners and two-homeowners outside designated adjustment areas, and by 0.2?0.8 percentage points for multi-homeowners with three or more houses or two-homeowners in designated adjustment areas, but the effort failed.
Minister Kim's mention of strengthening holding taxes is interpreted as a willingness to swiftly pass the amendment to the Comprehensive Real Estate Holding Tax Act in the 21st National Assembly. In fact, since the ruling party holds nearly 180 seats in this National Assembly, many analysts believe the amendment is likely to pass quickly.
Kim said, "If the amendment passes in the 21st National Assembly, the tax burden on multi-homeowners will increase, which will be effective," and explained, "In overseas cases, some countries differentiate tax rates on property tax between multi-homeowners and actual residents." She added, "Through tax strengthening and recovery mechanisms, excessive liquidity should be prevented from flowing into the real estate market."
Regarding Gimpo and Paju in Gyeonggi Province, where housing prices have risen due to a 'balloon effect' after the June 17 measures, she hinted at the possibility of additional regulations. When asked if these areas could be designated as adjustment areas next month, she said, "When the government announced the measures, these areas did not meet the conditions for designation as regulated areas," and added, "(By next month) I think they will largely meet the conditions."
She predicted that the June 17 measures would take full effect in the market starting next month, as policies such as strengthening actual residence requirements for mortgage loans in regulated areas and imposing actual residence requirements on users of the Bogeumjari Loan will be implemented from next month. Minister Kim said, "Each measure has different implementation dates," and added, "It will take until mid-July for them to actually operate in the field."
Regarding the requirement of at least two years of actual residence to be eligible for reconstruction association member allocation in speculative overheated districts in the metropolitan area, she emphasized, "In our society, reconstruction apartments have turned into a kind of investment target," and said, "There is a need to correct that." In response to criticism that tightening jeonse loan regulations has made it harder for ordinary people to buy homes, she stated, "Jeonse loans are loans to support insufficient funds for low-income people to find jeonse housing," and expressed the opinion that it is inappropriate to obtain loans while already owning a house.
Meanwhile, Minister Kim also addressed the recent controversy over the conversion of Incheon International Airport Corporation workers to regular positions. She said, "In 2017, through labor-management agreement, it was decided to directly employ workers in areas related to the life and safety of airport users," and added, "Security screening is a core safety task, so direct employment was implemented." She further emphasized, "Those preparing for employment can apply for general positions and become corporation employees," assuring that there will be no harm to the youth.
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