Seoul's Top Regions in Comprehensive Real Estate Tax Favor Yoon... Real Estate Policy Also Key in Local Elections

Analysis of Seoul Public Opinion in the 20th Presidential Election Compared with the Final Comprehensive Real Estate Tax Amount

President-elect Yoon Suk-yeol [Image source=Yonhap News]

[Asia Economy Reporters Ki-min Lee and Myung-hwan Lee] The voting patterns in Seoul, the decisive battleground of the 20th presidential election, sharply diverged based on real estate issues. It is anticipated that Seoul's local elections, scheduled for June 1, will also be influenced by the new government's real estate policies.

According to the Central Election Commission and the National Tax Service on the 14th, the districts in Seoul where President-elect Yoon Suk-yeol received high vote shares corresponded closely with areas having high comprehensive real estate holding tax (종부세) assessments.

In this presidential election, Yoon led in 14 out of 25 districts. Notably, in the top Seoul districts with the highest 종부세 assessments, such as the Gangnam 3 districts and Yongsan-gu, Yoon's vote share was high. As of 2020, the 종부세 assessed amounts in Seoul were as follows: Gangnam-gu 872.071 billion KRW, Jung-gu 321.949 billion KRW, Seocho-gu 305.982 billion KRW, Yongsan-gu 156.765 billion KRW, and Songpa-gu 124.99 billion KRW.

Yoon's vote shares were 67.01% in Gangnam-gu, 65.13% in Seocho-gu, 56.76% in Songpa-gu, and 56.44% in Yongsan-gu. Although the housing portion of the 종부세 assessed amount is low, the combined land portions (both comprehensive and separate) are high, which is why in Jung-gu, ranked second in 종부세 assessed amount in Seoul, Yoon secured a majority with 50.96% of the vote.

On the other hand, among the districts where Lee Jae-myung of the Democratic Party received higher support than Yoon, only Gangseo-gu (47.947 billion KRW), Seongbuk-gu (32.075 billion KRW), and Seodaemun-gu (20.43 billion KRW) had 종부세 assessed amounts exceeding 20 billion KRW.

Unlike the 2018 local elections and the 2020 21st general elections, real estate issues have been a decisive factor in Seoul's voting patterns from last year's by-elections through this presidential election. Analysts interpret this as a judgment on the Moon Jae-in administration's continuous real estate policy failures and rising apartment prices. In the 2018 local elections, except for Seocho-gu, all 24 districts elected Democratic Party-affiliated district heads, and in the 2020 21st National Assembly elections, the Democratic Party won 41 out of 49 Seoul constituencies, overwhelmingly defeating the United Future Party (now People Power Party).

However, in last year's Seoul mayoral by-election, Oh Se-hoon won decisively with 57.50% against Democratic candidate Park Young-sun's 39.18%, a margin of 18.32 percentage points, and Oh secured a majority vote share in all 25 districts. Particularly in areas with high 종부세 assessed rates such as Gangnam (75.5%), Seocho (71%), Songpa (63.9%), and Yongsan (63.4%), Oh showed strong support.

It is expected that President-elect Yoon's real estate pledges, if pursued after his inauguration, could influence the June local elections. During the recent presidential election, Yoon proposed real estate policies including the integration of 종부세 and property tax, reverting housing official prices to 2020 levels, temporary exemption of capital gains tax surcharges for multi-homeowners, increasing floor area ratio in urban areas up to 500%, easing the excess profit recovery system for reconstruction, and raising the loan-to-value ratio (LTV) up to 80%.

Political analyst Jong-hoon Lee stated, "Elections held immediately after a presidential election and the start of a new administration tend to favor the new government and the president's party. Especially since apartment prices in Seoul rose during the five years of the Moon Jae-in administration alongside sharp increases in real estate-related taxes, if Yoon pursues policies to abolish these taxes and expand housing supply, it is expected that support for the People Power Party will be reinforced in the June local elections."