[Editorial] The revised real estate tax plan is still inadequate; the National Assembly should scrutinize it carefully

As the government sent its revised real estate tax reform plan to the National Assembly on the 1st, it unveiled changes that reflected some of the backlash. It raised the basic deduction for nonresident one-home owners under the Comprehensive Real Estate Holding Tax to 1.2 billion won, and adjusted the per-person deduction for couples with joint ownership from 400 million won to 600 million won. It made some concessions, including keeping the tax burden cap at 150 percent, but the fundamental disparity in taxation based on residency has still not been resolved. The National Assembly should fully consider these concerns in its review.
The original problem with the reform plan was that it failed to properly reflect the diversity of living arrangements and market conditions. Some provisions were revised, but the difference remained: a resident one-home owner can receive a deduction of 1.4 billion won, while a nonresident one-home owner is limited to 1.2 billion won. That means the principle of differential taxation still stands. Nonresident end users with legitimate reasons such as schooling, job transfers, medical treatment, overseas stays, or supporting parents may still face disadvantages.
It is also unclear whether the revised plan can fundamentally prevent instability in the rental market, where supply of jeonse and monthly rental units could shrink and prices rise as nonresidents switch to owner occupancy or landlords pass on the burden. Critics also say it will be hard to avoid accusations of a modern-day version of the old practice of forcing elderly retirees out of homes they have lived in for decades because of tax pressure.
That said, listings have been increasing over the past month, especially for high-priced apartments, since the tax reform plan was announced. According to real estate big data firm Asil, apartment listings in Seoul rose 12 percent as of the 30th of last month from the day the reform plan was announced, led by the Gangnam 3 Districts. Listings also increased in the Han River Belt, including Mapo District, Seongdong District, and Dongjak District.
The government's policy aimed at encouraging owners to hold just one 'good' home appears to be having some effect for now. However, prices and asking rents for mid- to low-priced apartments continue to rise amid concerns about a shortage of supply. In particular, apartments in Gangbuk and outside Gangnam, where borrowing is capped at 600 million won, are still posting record highs, which experts say makes it difficult to stabilize home prices. In other words, a rise in listings of high-end homes alone is not enough to steady the broader housing market.
The ball is now in the National Assembly's court. It is reasonable for the ruling Democratic Party of Korea to acknowledge the revised plan's intent to favor actual residents while also stressing 'tax fairness among one-home owners and predictability of tax burdens' and signaling further adjustments. This should not end in a half-baked compromise driven by political bargaining. Public dissatisfaction with real estate policy has also affected the approval ratings of the president and the ruling party, so lawmakers must carefully examine the flaws in the government's proposal. The opposition, too, should do more than criticize for political gain; it should present alternatives that minimize market disruption and ease the tax burden on end users.
Tax policy must be carefully designed because it directly affects property rights and shapes the flow of capital in the market. A tax system pushed through while ignoring resistance on the ground is bound to distort the market and provoke public backlash. During the National Assembly review, both parties should move beyond piecemeal fixes that remain trapped within the framework of the original bill. They need to conduct a full reassessment and produce a realistic revision that eases the burden on end users while stabilizing the housing market.