DP’s real estate committee considering to ease transaction tax, raise property tax

May 13, 2021, 09:30 am

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Democratic Party’s new leader Song Young-gil talks with Kim Jin-pyo, the chairman of the ruling party’s special committee on real estate, at the National Assembly on May 12, 2021./ Photographed by Lee Byung-hwa (photolbh@)

AsiaToday reporters Jo Jae-hak & Park Joon-oh

While the real state policy failure has been cited as a key factor in the ruling Democratic Party’s (DP) losses in mayoral by-elections in Seoul and Busan on April 7, the government and the ruling DP are considering readjustment in housing taxation, including lowering transaction tax and raising property holding tax. They will also review the relaxation of financial regulations to help non-homeowners purchase a house.

“The grand principle of the special committee is to meet the global standard of strengthening the property tax and lowering the transaction tax,” said Kim Jin-pyo, the head of the ruling party’s special committee on real estate, on Wednesday.

However, he pointed out that actual demand transactions have frozen due to the current administration’s regulation-oriented real estate policy. Recently, President Moon Jae-in admitted to the failure of his administration’s real estate policy during his latest special address to mark four years in office.

“Home prices in metropolitan area have skyrocketed abnormally,” Kim said. “The government has repeated finance and taxation in a short period of time to curb soaring house prices, which unintentionally brought side effect that prevented actual demand transactions of single house owners.”

“Under the grand principle, we will carefully review and correct the tax issues that hinder actual demand of single house owners and non-homeowners who want to purchase their own house for the first time,” Kim said.

The government and the ruling party plan to focus on lowering the burden of housing purchases for non-homeowners. “In the case of non-homeowners or single home owners who have resided for long term, the burden of either preparing a new house or owning a single house should be reduced,” said Presidential Chief of Staff for Policy Lee Ho-seung in a radio show. “What the government is particularly concerned about is that the non-homeowners and young newlyweds, which account for 44% of the total households, have to acquire new homes,” he said. “The government and the party are discussing various plans,” he added. It seems they are pushing to ease regulations on non-homeowners and single home owners.

Furthermore, DP leader Song Young-gil stressed his pledge made for the party’s May 2 election, which is raising the ratios of loan to value to 90% for those who do not own a home. “We will review ways to make countermeasures for actual demanders in harmony with the stabilization of home price,” Song said.

#real estate #transaction tax #property tax #Democratic Party