Lee Jae-myung: "If Property Tax Increases, 70-80% of the Public Would Support It"

Lee Jae-myung, the Democratic Party presidential candidate, is being interviewed by Yonhap News at a hotel in Seongnam-si, Gyeonggi-do on the 29th.
[Photo by Yonhap News]

[Asia Economy Reporter Hwang Sumi] Lee Jae-myung, the presidential candidate of the Democratic Party of Korea, emphasized that "unfair acts should be made impossible to earn money from" while discussing real estate issues.

In an interview with Yonhap News on the 29th, Lee announced plans to establish a real estate supervisory agency with investigative authority and enforce strong legal measures.

Lee cited violations of the Farmland Act due to real estate speculation as an example, stating, "The Real Estate Supervisory Agency should investigate such cases, and if actual farming is not conducted, the land should be sold. If there are no buyers, the state should create a public agricultural corporation to lease the land at a low price."

He continued, "If such measures are institutionalized, real estate problems can be sufficiently controlled," adding, "Because public dissatisfaction with real estate is very high, there are many voices of resentment regarding Daejang-dong as well."

He pointed out, "To fundamentally solve the problem, unearned income from real estate must be minimized," and noted, "People feel like they have become 'sudden paupers,' so the sense of loss and alienation caused by distortions in the real estate market is very large."

Lee identified raising property taxes and public recovery of development gains as fundamental solutions to real estate issues. He said, "The biggest task is to legally abolish systems monopolized by the private sector and to recover development gains publicly," adding, "More fundamentally, land should be used by socially accepted necessary individuals or companies."

As a way to prevent long-term holding of real estate for speculative purposes, he proposed "raising property taxes." He said, "If we raise property taxes, 70-80% of the public would agree. Simulations show that more people benefit than pay, with over 90% receiving benefits."

However, he acknowledged the need to protect actual users. Lee explained, "In principle, one household should reside in one house, and in such cases, protection should be provided," adding, "There is no need to consider it unfair to benefit from rising house prices in that way."

He also announced plans to establish a 'Real Estate Supervisory Agency.' This agency would have investigative authority to monitor and supervise activities that disrupt the real estate market.

Furthermore, Lee expressed the view that the housing market supply method should be changed to a public-led approach, explaining that the root cause of housing market problems is supply-demand imbalance.

He said, "Supply has been abnormal so far. That is why house prices around new towns are rising," adding, "It is not fair-price sales but lottery sales that have caused a frenzy in real estate sales."

He proposed, "The Korea Land and Housing Corporation (LH) should not only sell land but also build buildings. They can subcontract to private construction companies," and suggested, "When developing land, they should not sell it but only sell buildings or build basic housing so that people can live there for life if they want."

Finally, Lee stated, "I believe house prices are not normal," and added, "I cannot say there is no possibility of prices rising further, but the main cause of excessive purchases is fear-driven demand stemming from anxiety."