Controversy Over Abolishing the Long-Term Holding Special Deduction Intensifies... Jung Won-oh's Camp Says It Shares the Party's Position

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[The Financial News] The controversy over abolishing the Long-Term Holding Special Deduction for capital gains tax on one-home owners is growing as it overlaps with the June local elections. Amid repeated attacks from the People Power Party, the Democratic Party has moved to calm the situation, saying it has never considered abolishing the deduction. Against this backdrop, Jung Won-oh, the Democratic Party candidate in the Seoul mayoral race, where the deduction would have the biggest impact, said his camp shares the party's position.
A representative of Jung Won-oh's Seoul mayoral candidate campaign committee told The Financial News on the 21st that "abolishing the Long-Term Holding Special Deduction is not the Democratic Party's position, and it has never been reviewed," adding that "Candidate Jung is in line with the Democratic Party's position."
The official added that "Candidate Jung's stance on real estate is to provide housing supply, which can be handled at the mayor's discretion, faster and better than Oh Se-hoon," and emphasized that "the issue of regulation is something that must be coordinated with the Lee Jae Myung administration, so there is no particular difference from the party's position."
The controversy began when Yoon Jong-oh of the Progressive Party, a member of the broader ruling bloc, introduced a revision to the Income Tax Act that included the measure. Democratic lawmakers Lee Gwang-hee and Lee Joo-hee also signed on as co-sponsors. The issue intensified further after President Lee Jae Myung hinted on Social Networking Service (SNS) that the deduction for non-resident one-home owners could be abolished.
The People Power Party has been criticizing the move daily, warning that abolishing the deduction would bring a "tax bomb." It also pointed to the apartment in Bundang, Seongnam, Gyeonggi Province, owned by President Lee, saying capital gains tax could jump from about 90 million won to as much as 600 million won. The party has also pressed Democratic Party candidates running in major local races across the Seoul Capital Area, including Jung Won-oh, Choo Mi-ae, the candidate for Governor of Gyeonggi Province, and Park Chan-dae, the candidate for Mayor of Incheon Metropolitan City, to clarify their positions.
In response, the Democratic Party reiterated that it has never considered abolishing the deduction and that it will preserve the benefit not only for one-home owners who live in their homes, but also for non-resident one-home owners facing unavoidable circumstances. However, it said it is considering reducing long-term holding benefits for housing tied to speculation, in line with President Lee's concern that such benefits should be rolled back. Han Jeoung-ae, chairperson of the Policy Committee, said on the day, "This is the time to sit down together and think seriously about the lock-in of listings and the widening inequality caused by encouraging long-term holding of speculative homes."
Meanwhile, the Long-Term Holding Special Deduction allows one-home owners with homes valued at more than 1.2 billion won to deduct up to 80% of their capital gains when calculating capital gains tax, provided they sell after living in the home for 10 years.
uknow@fnnews.com Kim Yun-ho Reporter