President Lee: "42,500 acquisition-based rental apartments in Seoul... More listings would help stabilize home prices"

President Lee Jae-myung reiterated his commitment to stabilizing the housing market on the 10th, stating, "42,500 apartment units in Seoul is by no means a small number." He suggested that if the tax regime for registered rental housing is revised so that multiple-home owners face heavier capital gains tax, it is unlikely that the impact on stabilizing home prices would remain uncertain, signaling possible changes to the current private registered rental housing scheme.
On the same day, President Lee shared a news article on X (formerly Twitter) titled, "We are one-room suppliers, so why are we being targeted?... Rental business owners unsettled by president’s remarks," and added his own comments.
The article President Lee posted included industry views that even if rental business operators sell their properties, the effect on stabilizing housing prices would be uncertain.
In response, President Lee wrote, "The article states that ‘apartments account for only 16% (107,732 units) of acquisition-based rental housing, and about 42,500 of these are in Seoul,’" arguing that this volume is not small.
He continued, "The wording in the article, such as ‘only’ and ‘about,’ already reveals a certain intent, but if 42,500 apartments owned by multiple-home owners do not hold out indefinitely to enjoy capital gains and instead come onto the market to avoid punitive capital gains tax on multiple-home owners, it is hard to believe that ‘the effect on stabilizing home prices would be uncertain.’"
President Lee has been signaling that he may reconsider the private registered rental housing scheme and related tax benefits as part of efforts to stabilize the real estate market. The scheme was expanded in 2017 to boost private rental housing and provide tenants with stable living conditions, but it was sharply scaled back in 2020 amid criticism that it was fueling the growth of multiple-home owners.
On the 9th, President Lee also remarked, "There are views that question whether we need to grant permanent tax privileges just because a property was once part of the registered rental program, even though it is still a multiple-home property." He pointed out that "around 300,000 registered rental homes in Seoul (about 50,000 of them apartments) receive preferential treatment such as reductions in acquisition tax, property tax, and comprehensive real estate tax, as well as permanent exemption from heavier capital gains tax on multiple-home owners." He added, "Once the mandatory rental period ends, the reductions in property tax and comprehensive real estate tax disappear, but the privilege of exemption from heavier capital gains tax on multiple-home owners continues."
He went on, "The compensation for mandatory rental obligations should be sufficient in the form of reduced acquisition, holding, and property taxes during the rental period, plus a temporary exemption from heavier capital gains tax after the rental ends." He added, "While a certain window of time to dispose of the properties should be granted, once the rental period is over, the tax treatment of registered rental homes should be aligned with that of ordinary rental housing to ensure fairness."
He further explained, "Because the burden would be too great if we abolished the exemption from heavier capital gains tax on registered rental homes immediately, we could consider phasing it out after a certain period (for example, eliminating half of the benefit for one to two years, and then abolishing it entirely after two years). There are also opinions that the change should be limited to apartments only."
He also wrote, "In a capitalist society, people are fundamentally free to own multiple homes or live in ultra-high-priced properties worth as much as gold, but they should bear some responsibility for the social problems that arise as a result." He stressed, "If registered rental homes owned by multiple-home owners are put on the market like ordinary multiple-home properties once the mandatory rental period and a certain exemption period from heavier capital gains tax have passed, this would have the effect of supplying hundreds of thousands of units."
Earlier, on the 8th, President Lee had already raised the issue, saying, "It might be understandable if someone built homes specifically for rental purposes, but it is strange that people can buy as many homes as they want simply by registering as rental business operators." He asked rhetorically, "If we allow a single person to accumulate hundreds of homes, wouldn’t it be impossible to meet demand no matter how many tens of thousands of homes we build and supply?" He then sought public opinions on whether acquisition-based rental, as opposed to construction-based rental, should continue to be allowed.

cjk@fnnews.com Choi Jong-geun Reporter