"Practically Impossible... Difficult to Separate 1 Household 1 Home, Seoul Ordinance Must Be Amended"
Jo Eun-hee, Seocho District Mayor, "Will Halve Property Tax on Apartments Over 900 Million Won"
[Asia Economy Reporter Wondara] Lee Haesik, a member of the Democratic Party of Korea, criticized the property tax reduction proposed by Cho Eunhee, the mayor of Seocho District, Seoul, as "practically difficult" and called it populism. Earlier, Mayor Cho stated, "The rapid increase in tax burden has caused great difficulties for residents," and announced, "Seocho District will implement a 50% reduction in property tax for single-family homeowners with properties valued under 900 million won."
On the morning of the 11th, Lee appeared on MBC Radio and said, "More than 50% of Seocho District properties are valued over 900 million won, and apartment prices have risen by hundreds of millions or even billions of won. This is just fair taxation accordingly," adding, "Calling this a tax bomb and proposing property tax reductions seems to be a populist approach."
Lee also pointed out that "(property tax reduction only in Seocho District) is 'almost impossible in reality.'" He said, "You mentioned a 50% reduction for single-family homeowners, but there is a problem. It is not easy to separate single-family homes. When you check the resident registration, people may own real estate in other areas or households may be separated. All must be separated, which is very difficult," he added.
When asked if the central government's reduction policy was similar, he replied, "That is why the government did not explicitly state 'single-family homeowners.' Even in 2005 and 2006, reductions were applied uniformly, not only to single-family homeowners."
Lee said, "50% of the property tax is collected and used by Seocho District, but the other 50% is Seoul city tax," adding, "Even if the district council of Seocho creates an ordinance to allow the district portion, the city portion requires a Seoul city ordinance." He continued, "According to Article 111 of the Local Tax Act, such measures are only allowed in cases of disasters or special financial needs," and added, "Seocho District does not have any special disasters, such as floods."
Regarding Mayor Cho citing COVID-19 as a reason, Lee countered, "The whole country is experiencing this," and said, "The situation is somewhat exaggerated and could lead to abuse of discretion."
However, Lee acknowledged, "There is a double burden due to the significant increase in holding taxes such as the comprehensive real estate tax," and said, "Since property tax is also a holding tax, it is a desirable policy to uniformly reduce it to an appropriate level." He added, "Wouldn't it have been a better approach to propose to the government together with Seoul city to induce a nationwide uniform property tax reduction from Seoul city?"
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