Ruling Party Calls to Reconsider Tax Reform for Registered Rental Housing... Government Also Considering Partial Amendments

[Financial News] As the government pushes to reduce tax benefits for registered rental business operators, voices within the Democratic Party of Korea (DPK) are growing louder, calling for a review amid concerns that it will contract the supply of jeonse and monthly rent housing. The government, however, has left open the possibility of some adjustments, such as considering maintaining the current period for the special tax exemption on residential housing for registered rental business operators.
Democratic Party of Korea (DPK) lawmaker Lee Un-ju stated at a forum held at the National Assembly on the 3rd titled 'Is Tax Reform for Registered Rental Housing the Right Solution for Housing Stability for the Working Class?' regarding the government's tax reform plan, "I am concerned that it could result in significant difficulties for tenants paying monthly rent and deposits," adding, "At the very least, the attempt to hastily end this system should be postponed until these issues are resolved."
The government also left open the possibility of supplementing certain systems on this day. At a forum, Kim Man-soo, head of the Property Tax Division at the Ministry of Economy and Finance, addressed the special tax exemption for residential homes owned by registered rental business operators, stating, "The government proposal limits this to one year, but there were many opinions regarding restrictions on relocation during the legislative notice process." He added, "We are internally reviewing whether to maintain the current five-year limit." Furthermore, regarding cases where it is difficult to dispose of housing during reconstruction or redevelopment projects conducted via trust, he said, "We will review this once again."
The Ministry of Land, Infrastructure and Transport (MOLIT) also acknowledged that registered rental housing contributes to the stability of the jeonse and monthly rent market and stated its intention to address systemic difficulties. Regarding the criticism that registered rental business operators find it difficult to dispose of housing due to the actual residency requirement in land transaction permit zones, Jang Eun-seok, an official at MOLIT's Private Rental Policy Division, remarked, "I expect that details regarding the deferment of the actual residency requirement for the land transaction permit system will be announced soon," predicting that some difficulties would be resolved once the measure is implemented.
Voices are emerging within the Democratic Party of Korea (DPK)'s Housing Market Stabilization Task Force (TF) suggesting there is room for further discussion on the tax system for registered rental business operators. Rep. Oh Gi-hyoung, a TF member and the ruling party's ranking member of the National Assembly's Finance and Economy Committee, stated on the radio the previous day regarding the government's revised real estate tax reform plan, "I do not believe (the ruling party's opinions) have all been reflected." He added that regarding areas for further discussion, "we need to observe the situation further regarding the issue of non-residential single-household housing, and there may be further opinions regarding the parts related to rental business operators."
On the other hand, the Democratic Party of Korea (DPK)'s floor leadership is taking a cautious stance, stating that discussions on additional tax reform at the party level have not yet begun. Rep. Heo Young stated, "Nothing has been discussed within an official framework so far," adding that relevant consultations between the party and the government have not yet been held.
Rep. Heo Young stated, "We must monitor the trend as downward stabilization of the real estate market is currently evident in various aspects," adding, "If we waver at this point, it could send a strange signal to the market." However, he left the possibility of future discussions open, noting, "Since the matter is ultimately finalized in the National Assembly through legislation, we will hold consultations between the party and the government before the bill is enacted."

[email protected] Song Ji-won Reporter