President Lee Says, "Look Into Why Home Prices in Gangnam Are Plunging"...Directly Rebuts Criticism of a Comprehensive Real Estate Holding Tax U-Turn

[Financial News] President Lee Jae Myung directly pushed back on criticism from within the ruling camp that the decision to partially ease the Comprehensive Real Estate Holding Tax for nonresident owners of a single home represented a “policy U-turn” and a “retreat from reform.”
That day, President Lee wrote on X, formerly Twitter, "There has been criticism asking why this lacks consistency and represents a retreat from reform after the government restored the tax exemption threshold for nonresident owners of a single home from the proposed 9 billion won to the current 12 billion won, reflecting political and public opinion that the original proposal was excessive, and decided to keep the annual increase cap for the Comprehensive Real Estate Holding Tax at the current 150% instead of raising it to 200%."
However, President Lee pointed out, "This criticism overlooks changes to the Comprehensive Real Estate Holding Tax on high-value nonresident single-home properties, changes affecting multiple-home owners or ultra-high-value homes, and, in particular, reductions in capital gains tax exemptions for nonresident single-home properties, ultra-high-value homes, and multiple-home owners." He continued, "A 200% cap on increases in the Comprehensive Real Estate Holding Tax is not inherently just, nor is 150% inherently unjust. It is simply a matter of policy choice, with preferences differing."
He stressed, "I ask that you examine the entire policy, rather than relying only on aggressive hard-line arguments, and also look into why housing prices in areas such as Gangnam District are currently plunging." He added, "If the thresholds had been kept at 12 billion won and 150% from the outset, would there have been no criticism?" He continued, "We need to consider whether it is reasonable to ignore more important issues, fail to see the whole picture, and attack the policy based on only a very small part of it."
President Lee emphasized that changing a policy in response to public opinion should not itself be defined as a retreat. He said, "Is changing one’s policy position unjust while sticking to it is automatically right?" He added, "Although this is said to be a post-truth era, I hope we can restore genuine politics by basing our decisions on the truth, putting the people and the nation at the center, and competing over what best serves the national interest." He continued, "This is a time when proper politics and competition to govern well are urgently needed—not incitement and slander based on falsehoods, or unconditional criticism."
At a Cabinet meeting the previous day, the government revised its initial plan to lower the basic deduction for nonresident owners of a single home under the Comprehensive Real Estate Holding Tax to 9 billion won. It decided to retain the current 12 billion won deduction and keep the current 150% cap on the tax burden instead of raising it to 200%. The revision came 29 days after the tax reform plan was announced on the 3rd of the previous month.
Cho Kuk, head of the Innovation Policy Research Institute of the Rebuilding Korea Party, criticized the decision that day, saying, "What the Democratic Party of Korea and the government protected was the interests of the top 1%," and adding, "They only strengthened the market’s belief that if you hold out, they will eventually back down."
[email protected] Seong Seok-woo Reporter