President Lee: "Abnormal Concentration of Resources in Real Estate... Distortions Must Be Corrected" (Comprehensive)

President Lee Presides Over Cabinet Meeting
Signals Active Control of Real Estate Bubble, Citing Japan as a Cautionary Example
"Undermines Growth Potential and Deals a Severe Blow to the National Economy"
"Capital Gains Tax Hike on Multiple

On January 27, President Lee Jaemyung emphasized, "We must correct the distorted allocation of resources in our society, which is abnormally concentrated in real estate." As he recently signaled the end of the temporary suspension of the heavy capital gains tax on owners of multiple properties, set to expire on May 9, he reiterated his commitment to using policy tools to control the real estate bubble.

Yonhap News Agency

That day, President Lee presided over a Cabinet meeting at the Blue House and stated, "Real estate issues have become a topic of controversy these days." He added, "The excessive and unproductive expansion of real estate inevitably inflates a bubble. This not only undermines our growth potential but could also deal a severe blow to the entire national economy."

President Lee's remarks are related to the recent controversy sparked by the decision not to extend the suspension of the heavy capital gains tax on multiple homeowners. He said, "It was clearly planned from the outset that last year's extension would be for only one year," and criticized, "Yet people naturally expect it to be extended again. When we announced there would be no further extension, critics attacked the policy as if a new heavy capital gains tax was being introduced."

He continued, "This may stem from a misunderstanding of real estate policy, but it could also be an unjust attack," stressing, "We must not be swayed by such things."

Regarding the abnormal real estate market, President Lee warned, "It undermines the trust of our society's members and could destabilize the entire community." He added, "We must learn from the painful lessons of our close neighboring country, which experienced a lost 20 or even 30 years and great turmoil because it failed to properly control its real estate bubble." This was seen as a reference to Japan, which fell into a prolonged recession after its real estate bubble burst in the early 1990s.

He also expressed his intention to continue policies to stabilize the real estate market. President Lee said, "To avoid such difficulties, we must consistently and stably pursue effective policies based on firm determination. We must never tolerate unfairness and abnormality out of fear of immediate pain and resistance." However, he also noted, "We must simultaneously pursue proactive measures that the market demands."

Yonhap News Agency

He further called for the swift improvement of unreasonable systems that hinder the normalization of the capital market, in order to accelerate the shift toward productive finance. He stressed that for the stock market's upward trend to lead to structural changes in the economic framework, the stable growth of the real economy-which is directly connected to people's lives-must be ensured, and that opportunities and benefits of growth must be widely shared across the national economy.

President Lee stated, "Our capital market, which has long been neglected, is now becoming a solid foundation for the future growth of innovative industries and for the healthy accumulation of assets by the people." He continued, "The government should focus its policy capabilities on strengthening the foundation for mutual growth between large, medium, and small businesses, revitalizing venture startups, and building an ecosystem that supports second-chance entrepreneurship." He added, "We must also continue to pursue balanced national development, which is one of the most serious issues facing our society. The path to growth for all citizens can only become broader and stronger when all economic actors participate together, not just a few large corporations or specific regions and sectors."

Additionally, President Lee instructed officials to make greater efforts in policy communication and public relations. He said, "The starting point for policy success is to inform the public in a timely manner about what policies are being implemented and how." He added, "The success or failure of state affairs depends on the public's understanding and participation, so please focus on communication and outreach." President Lee also noted, "According to the evaluation of policy communication by each ministry, twelve agencies-including the Ministry of Employment and Labor, the Ministry of SMEs and Startups, the National Police Agency, and the Korea Meteorological Administration-were selected as excellent institutions. Well done," he encouraged, adding, "Those ministries that fell short should make special efforts to improve."

Following his opening remarks, a discussion was held regarding the basic social policy framework and direction, prepared by the Ministry of the Interior and Safety and other relevant ministries. Agenda items for ministry reports included the Ministry of Economy and Finance's measures for public safety during the Lunar New Year, the Fair Trade Commission's rationalization of economic sanctions, the Ministry of Justice's plan to expand the introduction of special judicial police, and measures for managing tax arrears and non-tax revenue by the National Tax Service and the Ministry of the Interior and Safety. Additional cooperation items included encouraging blood donation (Ministry of Health and Welfare), an all-government response to spring wildfires (Korea Forest Service), preparations for the 2026 Winter Olympics (Ministry of Culture, Sports and Tourism), operation of K-Food base diplomatic missions (Ministry of Agriculture, Food and Rural Affairs), and plans to host the Korea-Central Asia Summit (Ministry of Foreign Affairs).