[Asia Economy Reporter Lee Ji-eun] Cho Eun-hee, the mayor of Seocho District, is pushing for a reduction in property tax for single-homeowners with properties valued under 900 million won, criticizing the government's 'tax bomb.' While this move is interpreted as an effort by Mayor Cho, who is considered a strong candidate for the opposition's Seoul mayoral race in April next year, to assert her presence, there are also voices criticizing it as an overreach, saying it could be an abuse of discretion.
On the 11th, Mayor Cho appeared on MBC Radio's 'Kim Jong-bae's Focus' and stated, "For those living in a 1 billion won (house), the state should protect the taxes for those who actually reside in their homes," announcing plans to reduce property tax by half for single-homeowners with properties under 900 million won. It is expected to result in a maximum saving of 200,000 won per household.
She said, "Currently, people are suffering from a tax bomb, a water bomb caused by heavy rain, and a virus bomb from COVID-19 (novel coronavirus infection)," citing these 'disaster situations' as grounds for tax relief. Article 11 of the Local Tax Act stipulates that when disasters occur, local government heads can reduce property tax by up to 50% through ordinances. "In 2005, almost all district offices in Seoul set a precedent by reducing property taxes," she added.
Mayor Cho is the first among Seoul's autonomous districts to advocate for property tax relief. She made this claim on Facebook on the 8th, and the government subsequently announced property tax reductions for low- to mid-priced single-homeowners who reside in their homes. This appears to be related to her being mentioned as one of the leading candidates for the Seoul mayoral by-election in April next year. Regarding the risk that Seocho District's property tax reduction could reduce the shared tax revenue going to other districts in Seoul, she said, "If Seocho District does it, other local governments will also reduce property taxes," adding, "(Even if only Seocho District does it,) we must ensure that residents of other districts do not suffer any disadvantages."
However, the ruling party has criticized Mayor Cho's proposal as an 'overreach.' Lee Hae-sik, a Democratic Party lawmaker and former mayor of Gangdong District, pointed out in the same radio interview, "Saying that only Seocho District should reduce property tax by half is somewhat an exaggerated interpretation of the situation and could be an abuse of discretion," adding, "It is impossible for Seocho District to unilaterally raise or lower taxes."
He said, "Property tax reductions are made when there is a disaster or special financial demand, but Seocho District is not uniquely affected by any disaster," and added, "It would be more appropriate to propose this through the Council of District Mayors together with Seoul City to the government, encouraging uniform property tax reductions nationwide."
Lawmaker Lee also criticized Mayor Cho's proposal as 'populism.' He said, "(Seocho District) has seen apartment prices rise by hundreds of millions or even billions of won, and the corresponding legitimate taxation is being imposed. Calling this a tax bomb or punitive taxation is an excessive claim," and pointed out, "Separately reducing property tax only for single-homeowners seems somewhat populist."
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