Oh Sehoon: "October 15 Measures Are Excessive Regulations... Higher Holding Tax Will Cause Side Effects" (Comprehensive) [2025 National Audit]

National Assembly Land, Infrastructure and Transport Committee audits Seoul City
Opposition lawmakers criticize October 15 real estate measures
Oh Sehoon: "Some areas with no price increase in the past 2-3 years are included"
Notification on regulated zones sent on the 13th, land transaction permit zones on the 15th
"Concerns over increased cost-sharing, shortage of relocation funds, conflicts, and project delays"

Seoul Mayor Oh Sehoon stated that the October 15 real estate measures are excessive and that the city was notified by the Ministry of Land, Infrastructure and Transport just before the announcement regarding the designation of land transaction permit zones.

During the National Assembly Land, Infrastructure and Transport Committee's audit held at Seoul City Hall on the 20th, Assemblywoman Kim Jungjae of the People Power Party asked Mayor Oh for his assessment of the October 15 measures. Mayor Oh responded, "I believe the regulations are excessive."

Yonhap News Agency

Ministry of Land, Infrastructure and Transport gave unilateral notice to Seoul just before land transaction permit designation

Mayor Oh explained, "If there had been sufficient discussion in advance, the Seoul Metropolitan Government would have wanted to present its opinion. For example, if you look at the statistics from the past two to three years, there are areas where housing prices have not increased. Many such zones were included this time, which is why I described the measures as excessive."

Assemblyman Kim criticized, "If you sum up these measures in one phrase, it is an expulsion order from Seoul targeting low-income citizens without homes or money. Ordinary people who are actual homebuyers usually purchase homes through loans, but all possible means and methods of obtaining loans have been completely blocked."

Regarding whether there was any exchange of opinions at the working level or among relevant officials about the designation of regulated zones, Mayor Oh said, "Two days before the announcement (on the 13th), we received a written request for our opinion on the designation of speculative and adjustment zones, and we replied that a cautious approach would be desirable. However, regarding the land transaction permit zone designation, we only received a verbal phone call just before the announcement. It was a unilateral notification."

Opposition party lawmakers criticized the Ministry of Land, Infrastructure and Transport, arguing that the process of collecting opinions on the designation of regulated areas was merely a formality. Assemblywoman Kim Heejeong of the People Power Party pointed out, "The city stated that 'the opportunity for homebuyers is being reduced and anxiety among the homeless is increasing, so a careful decision is needed,' but none of the city's opinions were reflected at all."

Kim Gyucheol, Director-General for Housing and Land at the Ministry of Land, Infrastructure and Transport, explained the latest measures, saying, "During the Moon Jae-in administration, the process of designating regulated areas was repeated in several stages, which resulted in a significant balloon effect. This time, we announced a comprehensive set of measures at once, aiming to stabilize the market preemptively."

Director Kim added, "Please understand that these measures are intended for genuine homebuyers. Although there may be various inconveniences in the short term, ultimately, this will help stabilize the market. We will continue to implement supply measures to further stabilize the housing market."

Government raises possibility of property tax hike ... Oh Sehoon warns of side effects

Mayor Oh expressed caution regarding the strengthening of property holding taxes as part of real estate tax reforms. In response to a question from Assemblyman Eom Taeyoung of the People Power Party, Mayor Oh said, "I have seen suggestions about raising the property holding tax while lowering transaction taxes, but if the holding tax is increased, other side effects will arise."

He further emphasized, "There could actually be an effect of rising housing prices due to higher holding taxes. I believe we need to be cautious about strengthening the holding tax."

On October 16 (local time), Deputy Prime Minister and Minister of Economy and Finance Koo Yooncheol indicated the possibility of a comprehensive restructuring of the tax system, including holding and transfer taxes, if the upward trend in housing prices in the Seoul metropolitan area is not contained. Deputy Prime Minister Koo pointed out, "Currently, Korea's real estate tax system imposes a low burden at the holding stage and a high burden at the transfer stage. This intensifies the 'lock-in effect,' preventing properties from being released onto the market."

Additionally, Mayor Oh noted that the latest real estate measures include elements that hinder redevelopment projects. He explained, "In reality, the tightening of funds can lead to increased cost-sharing, a shortage of contractors, and other issues that generate conflicts within cooperatives, which in turn slow down project progress. To prepare for such situations, Seoul will also establish support measures to ease funding difficulties in exceptional cases, and I intend to request the Ministry of Land, Infrastructure and Transport's cooperation on this matter."

Yonhap News Agency

Ruling party: "Construction starts have decreased since Oh Sehoon took office" VS Oh Sehoon: "Supply shortage caused by removal of redevelopment zones under previous mayor"

Ruling party lawmakers also raised concerns about the decrease in construction starts since Mayor Oh Sehoon took office. Mayor Oh countered that the removal of many redevelopment zones under the previous mayor has led to the current supply shortage.

Assemblyman Song Kiheon of the Democratic Party said, "Comparing housing permits and construction starts over the four years and three months since you took office, there is a significant difference before and after your term. The number of permits dropped from 310,000 to 220,000, and construction starts have sharply decreased between 2022 and 2024. Even after four years, the numbers have not increased, and the mayor must also take responsibility for this."

He continued, "Despite various efforts through the 'Shintong Planning' initiative, the effects have not been significant. Out of 119 areas where plans were established, 110 have completed redevelopment plans, and among these, only 66 have been designated as redevelopment zones. Of those 66, only 22 have received cooperative establishment approval, and just 4 have had project implementation plans approved."

Mayor Oh emphasized that the removal of redevelopment zone designations under the previous mayor is the main cause of the current supply cliff. He stated, "The previous mayor removed 389 redevelopment zones. From 2011 to 2020, the amount of redevelopment projects designated as zones decreased significantly. The removal and non-designation of zones at that time is the biggest cause of today's supply shortage."

Ruling party lawmakers also argued that the lifting of land transaction permit zones in the Jamsil, Samseong, Daechi, and Cheongdam areas last February served as a catalyst for rising housing prices in Seoul.

In response, Mayor Oh said, "The land transaction permit system is an anti-market policy tool, so unless it is relaxed during normal times, it cannot be used when prices surge. We changed our stance within four weeks and took immediate action, and as various indices show, real estate prices stabilized right after. Given the current high level of real estate prices, some are analyzing that this policy shift is the cause of the recent price surge, but I do not agree with that view."