Lee says tax cuts on homes not used as primary residences amount to a "policy encouraging housing speculation"

\r\n
[Financial News] President Lee Jae-myung, who is on a state visit to Vietnam, said on the 24th that the controversy over restrictions on the special long-term holding deduction is not a housing protection policy but a "policy encouraging housing speculation," arguing that cutting capital gains tax for homes bought as investments and held for a long time, especially high-priced homes, is unjustified.
In a post on X, Lee said, "'There is tax where there is income.' Just as people pay earned income tax on money they make through hard work, it is only natural to pay capital gains tax on profits from selling a home," adding that this was his view.
Lee acknowledged the need for capital gains tax relief for one-home owner-occupiers. He said, "If we want to protect one-home owners, tax relief for the period of actual residence is necessary."
He also pointed out that long-term deductions for non-occupied, investment homes encourage speculation. Lee asked, "Who exactly are the people who have spread the 'buy one good home' speculation centered on Gangnam District in Seoul, and driven a chain of surges in home prices, and who are the people shielding them?"
Lee also said, "Is it a tax bomb to normalize the absurd practice of giving tax cuts to people who speculated for years on a house they will never live in?"
He then stressed that a bill proposed by some opposition parties to limit the special long-term holding deduction is unrelated to the government. Lee said, "Just when things seemed quiet, the forces encouraging real estate speculation appear to have started moving again." He added, "The bill proposed by some opposition parties to limit the special long-term holding deduction has nothing to do with the government, yet they are distorting it and attacking as if it were a bill submitted by the president." The bill Lee referred to appears to be an amendment to the Income Tax Act introduced on the 8th by Yoon Jong-oh of the Progressive Party, which would abolish the special long-term holding deduction but allow up to 200 million won in tax credits when selling homes held for more than three years.
Lee said, "To properly protect the housing rights of one-home owners, it would be right to reduce the deduction for non-occupied holding periods and increase the deduction for occupied holding periods accordingly."
He added, "Normalizing the abnormal and escaping real estate speculation are this country's ultimate survival strategy," and said, "Home prices must stabilize before people can build a home, get married, and raise children."
west@fnnews.com Seong Seok-woo Reporter