"If We Let Real Estate Speculation Run Wild, the Country Will Collapse... Tax, Finance and Regulation Must Leave No Loopholes"

President Lee Jae-myung on the 24th once again underscored his determination to eradicate real estate speculation. Presiding over a Cabinet meeting at Cheong Wa Dae that day, President Lee warned, "If we let real estate speculation run wild, the country will collapse," and added, "Each ministry and agency may be preparing tax, financial and regulatory measures, but they must do so strictly and meticulously, leaving not even a 0.1 percent gap for abuse and completely shutting off every possibility of misuse."
His remarks at the Cabinet meeting drew particular attention because they came a day after he shared on his X (formerly Twitter) account an article comparing property holding taxes on housing in major foreign cities with those in South Korea. This was effectively the first time President Lee had directly referred to holding taxes on X. After sharing a news article titled "How do property holding taxes in major advanced cities compare with those in our country?" he wrote, "I was curious about this as well." Earlier, Kim Yong-beom, Cheong Wa Dae's policy chief, had also said in a recent media interview that they were "studying property holding taxes in metropolitan cities comparable to Seoul, such as New York City, London, Tokyo and Shanghai."
Later in the Cabinet meeting, President Lee said, "There seem to be people who believe in things like the idea that 'real estate never loses' or that 'in the end, if political pressure mounts, the government will give up, so let's just hold out.'" He continued, "Resistance driven by self-interest is inevitable, but if we cannot overcome it, this government has no future, and neither does this country. We must prepare thoroughly and do this right."
He went on to say, "Soaring real estate prices are driving up inflation, and for companies and industries they raise costs and production expenses, causing us to fall behind in competitiveness. Prices rise further, and this vicious cycle continues. This is one of the Republic of Korea (ROK)'s most serious structural problems." Pointing to real estate speculation as a key culprit, he stressed, "We must design the system itself with utmost rigor, and each ministry and agency that holds authority must also prepare enforcement measures thoroughly. I ask you to be extremely strict and meticulous in preparing and enforcing measures against collusion or manipulation." President Lee particularly emphasized that in drawing up measures to stamp out real estate speculation, "There is no need to take political considerations into account at all."
Cheong Wa Dae, for its part, reiterated that a property holding tax remains a measure of last resort. Kang Yu-jung, spokesperson for Cheong Wa Dae, was asked at a briefing at the Chunchugwan Press Center at the Blue House after the Cabinet meeting about President Lee's post on X and his Cabinet remarks. She replied, "As we have consistently said, the property holding tax is a policy option to be considered only as a last resort."
President Lee had also said at the Cabinet meeting on the 17th, "Taxes are a last resort. To put it in wartime terms, taxes are like nuclear weapons. They must not be used lightly," while adding, "Even so, if circumstances arise where they must be used as a last resort, then we must use them."
Meanwhile, at the Cabinet meeting that day, a bill to establish the Public Prosecution Office and the Serious Crime Investigation Agency (Serious Crimes Investigation Agency, or Jung-su-cheong) in October was approved. This came just three days after the bill passed the National Assembly's plenary session under the lead of the Democratic Party of Korea. Once the law is promulgated, the legal procedures will be complete for creating new criminal justice bodies that will separately handle indictments and serious crime investigations, replacing the Prosecutors' Office, whose 78-year history will come to an end on October 2 under the amended Government Organization Act.
Under the bill, the Public Prosecution Office will lose its investigative powers in line with the principle of separating investigation and prosecution, and will be responsible solely for filing and maintaining indictments. It will operate under a three-tier structure consisting of the Public Prosecution Office, regional Public Prosecution Offices and local Public Prosecution Offices. The authority of the existing prosecution service to direct and supervise special judicial police officers has been abolished, and a clause prohibiting abuse of authority has been newly introduced. Dismissal from office has been explicitly added as grounds for disciplining prosecutors, allowing them to be removed without separate impeachment proceedings. The Serious Crime Investigation Agency will be established under the Ministry of the Interior and Safety (MOIS) and will investigate six major categories of crime: corruption, economic crimes, defense industry crimes, narcotics, insurrection and treason, and cybercrime. The so-called offense of distorting the law, as well as crimes committed while in office by officials of the Public Prosecution Office, the police, the Corruption Investigation Office for High-ranking Officials (CIO) and the courts, will also fall within its investigative remit.
In addition, as part of energy-saving measures in response to the war in the Middle East, President Lee mentioned introducing a five-day rotation system for public-sector vehicles and said, "Please study ways to temporarily restrict free public transport for seniors during one or two peak hours that coincide with office workers' commuting times." He added, "The Ministry of Health and Welfare will also need to be involved, so let's look into it," to which Jeong Eun-kyeong, South Korea's Minister of Health and Welfare, replied, "We will review it together." However, Kang Yu-jung later explained, "His remark was made with the duration of the fallout from the Middle East situation in mind," and added, "What was discussed today was not a plan to carry this forward as a sustained, long-term policy."
cjk@fnnews.com Choi Jong-geun Reporter