President Lee: "Saying the long-term holding deduction abolition would be a tax bomb is blatant false incitement"

\r\n[The Financial News] President Lee Jae-myung on the 18th pushed back against the People Power Party's claim that abolishing the long-term holding special deduction for real estate capital gains tax would lead to a "tax bomb," calling it "a logical contradiction and blatant false incitement."
That day, Lee wrote the remark on X (social network), citing a media report that introduced comments by Jeong Jeom-sik, the PPP's Policy Committee Chairperson.
Earlier, Jeong had argued at the party's floor strategy meeting the previous day that the government and the Democratic Party of Korea's plan to abolish the deduction for one-home owners would "impose a tax bomb even on people who own just one home and live in it."
Lee criticized that claim, saying, "People should not be deceived by such lies in an attempt to justify a false argument that hides an improper motive," and added, "That is especially true for politicians and journalists who bear public responsibility."
He explained that the long-term holding special deduction for capital gains tax is a system that sharply reduces capital gains tax solely on the basis of long-term ownership, regardless of whether the owner lived there. He added that there is a separate system that reduces capital gains tax for long-term residence.
He went on to say, "If someone bought a house not to live in it but to make money, then the tax on the gains from rising home prices is something they should naturally pay. Why should it be cut so drastically just because they held it for a long time?" He called that "a lie meant to rationalize a false argument that hides an improper motive."
He also added, "If earned income from one year of honest labor exceeds 1 billion won, nearly half is paid in taxes. Wouldn't it be better to cut the earned income tax for people who have worked for a long time with that money instead?"
In response to concerns that abolishing the deduction would freeze the housing market by reducing listings, Lee said, "It would be solved if the policy is phased out gradually and step by step, giving people a chance to sell." He suggested a method in which the deduction would be abolished, but implementation would be delayed for six months, then only half abolished for the next six months, and fully abolished after one year.
He also said, "If the law explicitly states that the deduction cannot be restored, then even if power changes hands, the president would not be able to alter it at will, and there would be no point in holding out."
Lee said that if legitimate homes, such as a primary residence or a home temporarily left vacant because of work, are excluded and the burden on investment and speculative real estate is strengthened to advanced-economy levels, then holding out will only lead to losses. "Once the burden of ownership is normalized, today's excessively high real estate prices will inevitably return to normal," he said.
mkchang@fnnews.com Jang Min-kwon Reporter