Before the Election, the Democratic Party Revises Moon Government's Real Estate Policy... "Comprehensive Real Estate Tax Threshold for Multi-Homeowners Raised from 600 Million to 1.1 Billion Won"

Kim Seong-hwan "Legislation to be promoted soon reflecting Song's pledge"
"Multi-homeowners' comprehensive real estate tax threshold raised from 600 million to 1.1 billion KRW"
"Property tax cap for homeowners with official price over 600 million KRW limited from 130% to 110%"

[Asia Economy Reporter Oh Ju-yeon] The Democratic Party of Korea has indicated its intention to revise the real estate policies strengthened during the Moon Jae-in administration in a direction that partially relaxes them ahead of the June 1 local elections.

On the 16th, Kim Seong-hwan, chairman of the Policy Committee, met with reporters after the policy members' meeting held at the National Assembly and said, "At the general meeting on March 24, it was decided that there was a need to review the overall real estate policies of the Moon administration and create a comprehensive plan, so the Policy Committee has been working on drafting it," explaining this.

Kim Seong-hwan, the Policy Committee Chairman of the Democratic Party of Korea, is speaking at a press briefing on the supplementary budget bill held at the National Assembly on the 12th. Photo by Yoon Dong-joo doso7@

First, regarding the comprehensive real estate tax (종부세) on multi-homeowners, the party decided to raise the tax threshold from the current 600 million KRW to 1.1 billion KRW to align it with that of single-homeowners.

Chairman Kim said, "Last year, the Democratic Party adjusted the taxable value bracket for the comprehensive real estate tax for single-homeowners from 900 million KRW to 1.1 billion KRW, but at that time, multi-homeowners were not addressed. As a result, even though the asset value of someone owning two smaller row houses was less than that of a person owning one prime property in Gangnam, they were classified as taxpayers subject to the comprehensive real estate tax and bore an excessive holding tax burden," he explained.

He added, "We have reported a policy to align the tax thresholds for single-homeowners and multi-homeowners so that the comprehensive real estate tax will be imposed only on those with assets exceeding 1.1 billion KRW, and related legislation will be promoted early." He also noted that temporary two-homeowners or those who temporarily own two homes due to inheritance will be protected.

To reduce the burden of property tax, it was announced that the maximum tax rate cap for homeowners with properties valued over 600 million KRW based on official land prices will be limited from the current 130% to 110%.

Chairman Kim said, "Currently, the property tax cap for properties over 600 million KRW is set at 130%, so if house prices or official land prices rise, property tax could double within three years. Even if house prices rise, property tax will increase more gradually by limiting the property tax cap for properties over 600 million KRW to 110%," he explained.

Additionally, for new jeonse and monthly rent contracts, the party plans to promptly legislate a policy that grants a 50% reduction in holding tax through the introduction of a 'Good Landlord System' if rent increases are kept within 5%.

Chairman Kim said, "This was proposed as a pledge by Song Young-gil, the Seoul mayoral candidate, and adopted as the party's official stance. Considering its purpose, we plan to actively pursue legislation as soon as possible," he stated.