Cheong Wa Dae: "Grace period for heavier capital gains tax clearly ends on May 9... property holding tax is a last resort"

[The Financial News] In response to speculation that the government may overhaul the tax system, including strengthening the property holding tax, to stabilize the real estate market, Cheong Wa Dae stated that "the property holding tax is something we consider only on the premise that every other option is deemed impossible" and added, "Right now, we are at a stage where we place greater emphasis on the effectiveness of various existing policies."
Kang Yu-jeong, spokesperson for Cheong Wa Dae, said at a briefing held at Chunchugwan on the 2nd, "I recall that during the New Year press conference, President of South Korea Lee Jae-myung described the property holding tax as a last resort." Kang added, "We are deploying a range of policies on housing prices and the real estate market, and we will do our utmost to ensure they have a tangible impact."
In recent days, President Lee has repeatedly used social media (SNS) to stress his determination to actively work toward normalizing the real estate market. Some observers interpret this as a signal that he may even resort to politically sensitive tax measures to achieve that goal. On this point, spokesperson Kang explained that while the administration could eventually consider the property holding tax option, for now it is focused on enhancing the effectiveness of existing policies.
Kang also reiterated that the grace period for the heavier capital gains tax on multiple-home owners will clearly end on May 9 this year. He said, "Because this is a social commitment, President Lee has repeatedly stressed that the end of the grace period must be strictly observed," adding, "You could say he has consistently shown his determination to implement this in a policy-consistent manner." Earlier, President Lee had announced that the program would end as scheduled on May 9, but that transactions contracted on that date would still be exempt from the heavier tax rate.
However, after that, Chief Presidential Secretary for Policy Kim Yong-beom said at a press briefing on the 28th of last month that the government could further review technical details, such as whether to maintain the grace period only for contracts signed by May 9 or to allow an extra month or two. This prompted speculation that the exact end date might not yet be fixed. Kang’s remarks on this day, though, are being interpreted as an effort to reduce market confusion by once again underscoring that the fundamental principle of "ending on May 9" will be strictly upheld.
Meanwhile, President Lee shared a news article on SNS the same day and took aim at the People Power Party (PPP), writing, "How about you stop defending ruinous real estate speculation and engaging in such anachronistic red-baiting as pro–North Korea?" In another post, he shared an article reporting that asking prices for real estate listings in Gaepo-dong in Seoul’s Gangnam District had plunged.
On the 31st of last month, he declared, "We will succeed in stabilizing housing prices, no matter what it takes," and urged, "Instead of taking losses like with the so-called 'Gobverse' inverse leveraged ETF, multiple-home owners should take advantage of this final opportunity to be exempt from the heavier capital gains tax until May 9, enjoy the tax benefits, and use this chance to sell." In another post, he wrote, "There are plenty of legally and politically available tools to stabilize housing prices, but in reality, we have not been able to use the most optimal and powerful measures because of political calculations," adding, "If we trust the people and free ourselves from political gains and losses, it is by no means impossible."
cjk@fnnews.com Choi Jong-geun and Sung Seok-woo Reporter