President Lee Says Property Tax Reform Could Come Around July; Financial and Supply Measures to Be Announced Soon

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[Financial News] President Lee Jae Myung said on the 8th that he would soon finalize and announce reforms to property taxes as well as financial and supply measures. He signaled that homeowners who hold property for residence would be protected, while the burden on multi-home owners holding properties for speculation would be increased.
At the press conference held at the Yeongbingwan State Guest House to mark his first year in office, Lee said, in response to a question about future housing policy, "I want to organize taxes, finance, regulation and supply so that policy decisions can be made according to the national economy and common sense, and then roll them out all at once soon."
Lee said, "The tax issue may be possible around July," explaining that "it has to be handled all at once when we prepare next year's budget." On supply measures, he added, "We are organizing ways to expand supply, but we need to move a little faster. That, too, will likely be finalized and announced soon."
On taxes, he said he would distinguish between homes for actual residence and holdings for speculation. Lee stated, "If someone owns a home for living purposes, that should be protected. The burden should not become too heavy." He added, "If someone owns several homes, they should bear a corresponding burden."
He continued, "Property holding taxes in South Korea are generally low. Even if people buy and accumulate a lot, the burden is not very high." He stressed, "We need to raise the burden on homes held for speculation so they are sold and returned to the market."
He also emphasized the need to expand supply. Lee said, "We need to increase supply through new construction, reconstruction and redevelopment in the areas where it is needed." He pointed out that "supply fell sharply over the three years from 2022 to 2024. Approvals declined, and groundbreaking also fell."
On financial regulation, Lee said, "We must stop speculation with other people's money." He added, "Private debt is too high. If interest rates rise by just 1 percentage point, there is chaos. That distorts the economy."
He also said jeonse loans were one of the causes of rising home prices. Lee described jeonse as "a unique system found only in South Korea and a kind of private finance," adding that it is "now a fading trend." He said, "Extending too many jeonse loans was also a major cause of rising home prices," and noted that "in trying to keep things warm in the short term by offering jeonse loans and return-backed loans, we also created jeonse fraud."
On the jeonse shortage, he said, "It is true that the burden of jeonse has risen a lot," but added, "Statistically, there has not been a huge surge or anything like that. I am not saying this is a success; it is a normalization process." He also said, "Going forward, public supply will be offered as affordable, high-quality rental housing in good locations, where ordinary middle-class families can live comfortably."
Lee added, "Real estate speculation undermines the will to work and distorts South Korea's entire economic structure," saying that "breaking away from a republic of real estate speculation is the path to survival for this country."
west@fnnews.com Sung Seok-woo, Kim Hyeong-gu Reporter