Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol said Thursday that while people's decisions to own multiple homes they do not live in deserve respect, the government must ask whether actively supporting such behavior through policy is appropriate.

Speaking at a public forum on real estate taxation held at the Korea Federation of Banks building in Jung-gu, Seoul, Koo said, "Housing is fundamentally a place to live, but for some it has become something to buy and sell like a commodity."

Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol [Yonhap]
Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol [Yonhap]

About 60 people attended the forum, including Koo, academics, tax experts, representatives from the construction industry and related associations, and members of the general public.

Koo said the government should do everything it can to support owner-occupiers and must expand housing supply and strengthen financial assistance so that people without homes face no barriers to acquiring one. "It is hard to say that government policy has been centered on supporting people in their place of residence," he added.

On the comprehensive real estate tax — a key point of contention — Koo said the levy has long been based on the number of homes owned, but questioned whether that approach remains appropriate given the sharp rise in prices for individual properties. "There is a question of whether it is right for someone who owns a small home and someone who owns a high-priced home to pay the same tax, and also where to draw the line on ultra-luxury homes," he said.

He added that how revenue from the comprehensive real estate tax is spent — specifically whether it should be directed back into housing — could also become a point of debate.

Koo also raised the question of whether someone who has lived in a single home for many years should receive the same tax treatment as a multi-home owner. He said there are questions over whether capital gains tax incentives or benefits should be given to actual residents, whether the same standards should apply to those who simply hold property or own multiple homes, and whether the special deduction for long-term ownership is a matter of significant public interest.

He further asked whether it is appropriate to treat non-owner-occupied and owner-occupied homes identically under capital gains and comprehensive real estate taxes, and how to strike the right balance between holding taxes and capital gains taxes — issues he described as drawing considerable public attention.

The government had earlier released the main discussion topics for the real estate tax forum. Key agenda items include whether the primary goal of the tax regime should be market stabilization or tax equity, the appropriate level of the property holding tax burden, the assessment criteria for the comprehensive real estate tax, whether to apply differential taxation to owner-occupiers, non-residents and multi-home owners, and the tax threshold for ultra-luxury homes.

Also on the agenda are regionally differentiated tax burdens, whether tax reforms should be phased in, revisions to the special deduction for long-term ownership, the surcharge system for multi-home owners, capital gains tax relief tied to higher holding taxes, special tax provisions for the elderly, long-term residents and those relocating to regional areas, and a reduction in acquisition taxes for ordinary and middle-class households.

The government held the Ministry of Economy and Finance's real estate tax forum Thursday, following the Ministry of Land, Infrastructure and Transport's housing supply forum on Tuesday and the Financial Services Commission's housing finance forum on Wednesday. A grand forum chaired by President Lee Jae Myung on July 23 will consolidate the opinions gathered so far and finalize the broad direction of real estate policy, including taxation.


y2k@heraldcorp.com