President Yoon Chairs Livelihood Forum
"Moon Administration's Official Property Prices Up 63%... Holding Tax Doubled"
New:Bill Project Underway to Remodel Old Downtown
Budget Reorganized for 10 Trillion Won Investment Over 10 Years
Public Purchase of 100,000 Small and Medium Houses to Reduce Rent Burden
Commitment to Revamp Cultural and Artistic Infrastructure
President Yoon Suk-yeol stated on the 19th, "Our government will completely abolish the reckless (real estate) official price realization plan so that the public no longer has to worry." President Yoon explained that the previous Moon Jae-in administration's flawed real estate policies and the resulting punitive taxation effectively caused the state to unfairly collect rent from citizens who own homes, which is why the plan must be abolished.
On the same day, President Yoon presided over the 21st Public Livelihood Discussion Forum at the Mullae Arts Factory in Yeongdeungpo, under the theme "A New Miracle on the Han River Created by Urban Innovation," where he made these remarks.
President Yoon pointed out, "In particular, the so-called 'official price realization plan,' which artificially raised official prices every year, has revealed tremendous side effects everywhere and only increased the suffering of the people." The official price realization roadmap was introduced in November 2020 during the Moon Jae-in administration. It aimed to gradually raise the official price realization rate (the ratio of official price to market price) annually to 90% by 2035 at the latest.
President Yoon also announced the so-called New:Vill project, which includes urban regeneration projects that allow redevelopment of deteriorated houses and villas. He introduced plans to publicly purchase 100,000 small- and medium-sized houses and lease them at prices lower than the surrounding market rates.
Yoon: "Official Price Realization Policy is Populism and Bad Law"…Strong Criticism of Moon Administration's Real Estate Policy
At the public livelihood discussion forum, President Yoon intensified his criticism of the Moon Jae-in administration's official price realization roadmap, calling it "populism" and a "bad law." He explained that taxing real estate owners reduces transaction volumes, negatively impacts the construction industry, and ultimately causes rent to rise as well.
In his opening remarks, President Yoon said, "During the previous administration, official prices were raised by an average of 10% annually over five years, totaling a 63% increase." He criticized, "As a result, the housing cost burden for ordinary people owning a single home surged. Property taxes nearly doubled, increasing by about 100.8%. Effectively, homeowners ended up paying rent to the state, while renters paid rent to landlords, creating a situation where homeowners were paying the state rent equivalent to their housing costs." He particularly noted that official prices serve as indicators for administrative and welfare systems such as health insurance premiums and basic pensions, criticizing that "flawed real estate policies have not only sharply increased the housing cost burden but also worsened livelihoods in various ways."
In his closing remarks, President Yoon stated, "The government has effectively abandoned the official price realization plan. Some say, 'Isn't it good to collect taxes from the wealthy and redistribute them?' but that is populist logic." He added, "Whether you call it inciting the public or persuading them, it is a case of knowing one thing but not the other."
He continued, "If ownership is burdened, people will avoid owning, which disrupts construction and production itself. Ultimately, the number of owners decreases, and as holding burdens increase, rents rise, shifting the burden and taxes onto the less privileged." He explained, "I have thoroughly opposed excessive property tax burdens. It was a campaign pledge, and since the government’s inception, efforts have been made, including significantly lowering the comprehensive real estate tax."
President Yoon emphasized that since the government took office, official prices have been restored to 2020 levels, saying, "Our government will completely abolish the reckless official price realization plan so that the public no longer has to worry. It would be ideal to amend the law, but even before that, through various policy measures, we will ensure effects equivalent to abolition." Specifically, he explained that for a 30-pyeong apartment in Yeongdeungpo-gu, the combined property and comprehensive real estate tax was 5.59 million KRW in 2021, but after the government took office, it was reduced to 3.28 million KRW in 2023, a decrease of about 2.2 million KRW.
Urban Regeneration Projects to Match Seoul’s Status as South Korea’s Capital…Major Overhaul of Old Downtown with New:Vill Project
President Yoon also announced the promotion of the urban regeneration project "New:Village Project" (abbreviated as New:Vill), which will completely overhaul Seoul’s deteriorated old downtown areas. Although Seoul ranks 4th in Asia and within the top 60 worldwide as one of the most livable cities according to the British economic weekly The Economist, many old villas and deteriorated facilities mean that the quality of life is not evenly high. The government aims to achieve a "revolutionary change." President Yoon questioned, "Have the mural paintings and flowerbed projects carried out under the name of urban regeneration actually helped residents’ lives?" He emphasized, "We will completely reorganize urban regeneration projects to genuinely help livelihoods and revive the public’s well-being, rather than conducting showy projects."
Specifically, the New:Vill project announced by President Yoon involves redeveloping old detached houses and villa neighborhoods, which are difficult to redevelop compared to apartments, into new townhouses and modern villas. For neighborhoods of 10 to 50 old detached houses and villas, if residents wish, the government will provide low-interest loans for redevelopment funds and financially support the installation of communal facilities such as parking lots, CCTV, and exercise facilities. The government plans to start a pilot project call for proposals in the second half of this year and officially launch the project next year. It intends to invest 10 trillion KRW over the next 10 years by efficiently reorganizing existing budgets without additional fiscal burdens.
President Yoon also called for deregulation to ensure the success of the New:Vill project. In his closing remarks, he said, "Large construction companies tend to build uniform apartment complexes." He added, "Small-scale projects should preserve their characteristics with diverse forms, such as creating shared courtyards, varying building heights from 3 to 7 floors, using pilotis on the first floor for parking, including local shops, and so on. I hope many regulations will be eased to allow such diversity."
Promise to Purchase 100,000 Small- and Medium-Sized Houses for Affordable Jeonse and Monthly Rent and to Revamp Cultural and Artistic Infrastructure
To alleviate the housing cost burden for jeonse (long-term deposit lease) and monthly rent tenants, President Yoon introduced plans to publicly purchase 100,000 newly built small- and medium-sized houses over the next two years and supply them at affordable rents. He said, "We will relax rent regulations on corporate long-term rental housing to enable the private sector to play a better role in the rental market and expand fund loans and tax support." To ease housing costs for youth and low-income groups, the government plans to expand the support scope and duration of the "Youth Monthly Rent Support Project" and broaden the eligibility for housing benefits. President Yoon explained, "We will lease 25,000 houses to middle-class households without homes at 90% of the surrounding market price as jeonse, and supply 75,000 houses to low-income groups at monthly rents 50-70% cheaper than market rates."
President Yoon also promised to revamp cultural and artistic infrastructure to match Seoul’s population and status. He pledged to promptly remodel aging spaces and activate cultural and artistic hubs by linking areas around newly established national cultural and artistic facilities. The Mapo and Hongdae areas, popular among youth, will be developed into youth-centered complex art hubs with the establishment of the Danginri Cultural Creation Factory. The Seoul Station, Myeongdong, and Namsan areas will be developed into the "Seoul Station Complex Cultural Space" and the "Namsan Performing Arts Creation Center." President Yoon stated, "Creating impressive infrastructure to bring blockbuster-level world-class works to Seoul citizens and the public to enhance cultural and artistic literacy is important. To encourage creative artistic activities, even small-scale cultural infrastructure, such as repurposing warehouses, can contribute to economic growth."
About 60 people attended the discussion forum, including residents of aging areas and Seoul citizens, housing and urban planning experts, and cultural artists. Government officials present included Park Sang-woo, Minister of Land, Infrastructure and Transport; Yoo In-chon, Minister of Culture, Sports and Tourism; and Oh Se-hoon, Mayor of Seoul. From the Presidential Office, Policy Chief Sung Tae-yoon and Economic Chief Park Chun-seop also attended.
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