[Reporter’s Notebook] What People Want to Know Is Not the Government’s “Tax Philosophy” but the Future of Their Own Home

"With the upcoming local elections next year, the government is irresponsibly floating the idea of property holding tax reform-something it cannot immediately implement-merely to test public reaction, and is only causing confusion in the market."

A real estate expert, speaking on condition of anonymity, strongly criticized the recent public discussion of property holding tax by the government, calling it nothing more than empty rhetoric from policymakers. He added, "They are talking about increasing the property holding tax while lowering transaction taxes, but if they really do that, it will only provide an exit strategy for multi-homeowners who ignored the government’s warnings and hoarded apartments." Many also compare the current situation to the backlash faced by the Moon Jae-in administration, which ignored demographic changes and the realities of the aging population and tampered with the comprehensive real estate tax.

Less than a week after the government announced its October 15 real estate measures, market confusion is intensifying. This is because Kim Yongbeom, Chief Policy Officer at the Presidential Office, who hinted at a "strengthening of the property holding tax" philosophy last August, has now formalized the idea with the October 15 measures, using the phrase "reviewing adjustments to property holding and transaction taxes." For several days, key policymakers such as Deputy Prime Minister and Minister of Economy and Finance Koo Yooncheol and First Vice Minister of Land, Infrastructure and Transport Lee Sangkyung have repeatedly emphasized the need to strengthen the property holding tax in official settings. With discussions on tax reform accelerating before the effects of the October 15 measures can even be assessed, political parties are offering their own interpretations, further entangling the signals sent to the market.

Within the ruling party, some argue that "raising the property holding tax is inevitable," while others counter that "trying to control housing prices with the property holding tax is a misguided policy." The discord between the government and the party has even drawn in the Seoul Metropolitan Government, a key partner in real estate policy. Seoul Mayor Oh Sehoon recently criticized the government’s stance during a National Assembly audit, stating, "Strengthening the property holding tax could actually lead to higher prices." The opposition party also launched an attack, calling the policy "real estate terrorism." Ultimately, ahead of the launch of its "Task Force for Stabilizing the Housing Market" on the 22nd, the Democratic Party belatedly tried to contain the situation by declaring, "We will not discuss tax policy."

When policy direction wavers, the public loses trust in the government’s intentions. As a result, the sentiment that "if policies can change at any time, it’s better to act now" spreads, once again fueling speculative demand. Lee Changmu, Professor of Urban Engineering at Hanyang University, commented on the current situation, saying, "The government’s will to control the market is excessively strong, which is transferring anxiety to the political sphere. With local elections approaching, there is a high likelihood that politicians will try to change policy direction in response to regional public opinion."

When tax policy is swayed by political motives and the consistency of measures collapses, the public loses its basis for judgment. What people want to know is not the philosophy of the government, politicians, or local government leaders regarding taxes, but whether they will ever be able to own a home-or if that has already become impossible. The way to restore stability to the market is through consistent signals and a clear roadmap.