[Sejong=Asia Economy Reporter Kim Hyun-jung] Kim Hyun-mi, Minister of Land, Infrastructure and Transport, will hold a private dinner meeting with ruling party members of the National Assembly's Planning and Finance Committee to discuss real estate tax reform measures. The upcoming announced plan to strengthen holding and transaction taxes, aimed at responding to the recently detected strong upward trend in the real estate market, is expected to be a key topic.
According to National Assembly and government officials on the 8th, Minister Kim will have a private dinner meeting with ruling party members of the Planning and Finance Committee at an undisclosed location in Seoul that evening. As the head of the ministry responsible for the real estate market, Minister Kim made an urgent report on market trends to President Moon Jae-in on the 2nd, and on the 7th shared market conditions and discussed related measures at a ministerial meeting (Green Room Meeting) chaired by Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki. Following the President, the Deputy Prime Minister in charge of tax-related matters, and sequential meetings with relevant standing committees, there is speculation that the announcement of real estate-related reform measures is imminent.
The ruling party, government, and Blue House are currently considering punitive taxation measures to strengthen holding and transaction taxes targeting multi-homeowners and short-term holders in relation to real estate taxation. This response comes after house prices showed a strong rebound following the announcement of the June 17 measures, which expanded regulated areas and raised loan thresholds. In particular, the ruling party plans to process a tax law amendment bill within the July extraordinary session of the National Assembly that includes raising the capital gains tax rate up to 80% for homes held less than one year and retroactively abolishing tax benefits for registered rental housing businesses. It is also known that additional discussions are underway to reduce the tax burden on genuine homebuyers. The government plans to expedite tax reform primarily through legislation by ruling party members and will announce supplementary measures on housing supply and loan regulations later.
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