"Urgent Request for Congressman Gongbal"... Real Estate Tax Abolition Bill Faces Legislative 'Difficulty' in National Assembly

Jokyungtae to Push Bill Proposal by End of January
Fails to Meet 10 Co-sponsors Requirement
"Careful Review Needed for Bill Eliminating Tax Items"

The bill to abolish the Comprehensive Real Estate Holding Tax (종합부동산세, 종부세) currently being promoted in the National Assembly is facing difficulties due to a lack of support from fellow lawmakers. At least 10 co-sponsors are required to propose a bill in the National Assembly, but this threshold has not been met.

According to political circles on the 3rd, Rep. Cho Kyung-tae of the People Power Party uploaded a revision bill to abolish the 종부세 to the National Assembly's electronic system on January 25 and began recruiting co-sponsors. However, even after a month, he is still waiting for fellow lawmakers' consent. A representative from Rep. Cho’s office said, "There is no set deadline for receiving consent, so we will wait a bit longer," adding, "If the proposal requirements are met, we will proceed immediately, but it is hard to guarantee."

On the 28th, members of the Real Estate Evil Law Abolition Coalition held a picket protest urging the abolition of the comprehensive real estate holding tax in front of the National Assembly in Yeouido, Seoul. Photo by Kang Jin-hyung aymsdream@

The 종부세 is a tax imposed on high-value real estate and has faced strong opposition from the wealthy since its introduction in 2005. Especially during the previous Moon Jae-in administration, the tax base was sharply strengthened through measures such as the realization of official land prices, leading to fierce tax resistance. Last year, the number of people subject to the 종부세 reached an all-time high, with 22.4% of Seoul homeowners being liable for the tax. The number of people who applied for installment payments due to excessive tax burdens reached 68,338 last year, 24 times higher than in 2017 (2,907). Constitutional lawsuits against the 종부세 are also underway.

Because of this, bills to abolish the 종부세 have been proposed, but it remains difficult to secure the consent of 10 lawmakers in the National Assembly. The main reason is the perception that the bill cannot overcome the wall of the major opposition party. During the 19th National Assembly, former Saenuri Party lawmaker Yoo Seung-woo proposed a bill to abolish the 종부세, but it was discarded upon the expiration of his term. In the 21st National Assembly, Rep. Yong Hye-in of the Basic Income Party attempted to propose a bill to abolish the 종부세 in order to introduce a land tax to replace the current 종부세, but this also failed. Rep. Yong was unable to find co-sponsors at that time. A People Power Party official said, "Everyone knows that it won’t pass anyway due to opposition from the Democratic Party."

[Image source=Yonhap News]

Although the 종부세 is a national tax, it is allocated to local governments as a real estate grant tax. Therefore, if the 종부세 is abolished, local governments would suffer a decrease in tax revenue, which is believed to make lawmakers reluctant to put their names on the bill. Additionally, some lawmakers who are subject to the 종부세 are concerned about conflicts of interest. A staff member from a lawmaker’s office on the National Assembly’s Planning and Finance Committee said, "Many lawmakers pay the 종부세, so they are actually unable to agree."

The government also views the abolition bill as burdensome. Since the tax item would be eliminated, in-depth discussions on tax law amendments should precede the bill’s repeal. A government official said, "We need to continue discussions with a mid- to long-term vision," adding, "We must review the interconnections and comprehensiveness of property taxes as a whole."