Acquisition Tax Exemption for Young People and Newlyweds Buying Their First Home
Easing of Floor Area Ratio and Building Coverage Ratio Regulations
Introduction of Speculation Tax to Prevent Real Estate Speculation by Foreigners
Reform of the Progressive Corporate Tax Structure
Han Donghoon, a former leader and current presidential primary candidate for the People Power Party, pledged on April 30 to abolish the Loan-to-Value (LTV) ratio regulation in order to ensure housing stability for young people and newlyweds.
On the same day, Representative Ahn Sanghoon, policy committee chair of Han's "People First Camp," announced the eighth installment of their policy vision, titled "Tax and Real Estate Policies for a Growing Middle Class and Future Generations." The plan is to allow young people to benefit from the abolition of LTV limits without restrictions on the number of times during their youth. The campaign also promises to exempt first-time homebuyers who are young or newly married from acquisition tax, and to reform inheritance and gift taxes.
The comprehensive real estate tax, which has been criticized as an ideological tax, will also be abolished. The campaign argues that taxing real estate that has not been sold, and then imposing capital gains tax upon sale, constitutes double taxation. Therefore, if the capital gains tax is maintained, it is desirable to abolish the comprehensive real estate tax.
In response to concerns that abolishing the comprehensive real estate tax could negatively impact local real estate markets, Han promised to also abolish the heavy capital gains tax on multiple homeowners outside the Seoul metropolitan area. In addition, if a person owns one home in the metropolitan area and one outside it, neither property will be subject to heavy taxation.
To expand opportunities for homeownership where people want to live, regulations on floor area ratio and building coverage ratio will be eased. Han intends to extend these measures to the three Gangnam districts (Gangnam-gu, Seocho-gu, Songpa-gu) and Yongsan-gu in Seoul to achieve tangible results. He also plans to reduce the excessive burden of public contributions in areas designated for reconstruction. In areas where greenbelt restrictions are lifted, the supply of general housing units will be increased, and in places like Seocho Seoripul District, young people and newlyweds will be given priority in housing allocation.
Han also pledged to block real estate speculation by foreigners to prevent market disruption. At the acquisition stage, a speculation tax will be imposed, and for those owning multiple homes, a higher tax rate will be applied in proportion to the number of properties owned. At the holding stage, a 4% property tax?equivalent to the rate for luxury homes or vacation homes?will be imposed. At the transfer stage, even if a foreigner owns only one home, heavy taxation will be applied without any special tax benefits. Representative Ahn stated, "To block speculative demand for housing by foreigners, we will strengthen taxation at every stage: acquisition, holding, and transfer."
On April 20, 2025, candidate Han Donghoon from Group B is speaking at the first group debate of the People Power Party's 21st presidential primary held at ASSA Art Hall in Gangseo-gu, Seoul. Photo by National Assembly Press Photographers.
Tax policy will also be reformed. To reduce the tax burden on working citizens who support their families, the basic deduction for dependents and the child deduction in earned income tax will be expanded. The requirements for corporate tax credits for those on parental leave will be eased, and eligibility will be extended to those who reduce their working hours for childcare.
The progressive structure of corporate tax will be revised to enhance global competitiveness and attract outstanding foreign companies. The differential application of tax credits for research and development (R&D) investments based on company size will also be eased.To attract capital to the "regulation-free special zones" of the core "Five Megapolis" pledge, a "tax-free fund" will be introduced. If real estate in the metropolitan area is sold and invested in these special zones, significant capital gains tax benefits will be provided.
In addition, to ease the tax burden on overseas stock investors, the capital gains tax deduction limit will be raised from the current 2.5 million won to 50 million won, and a "carryforward deduction for capital losses" system will be introduced.
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