Prime Minister Han Seong-sook, Democratic Party of Korea leader Kim Min-seok, floor leader Han Byung-do, presidential Chief of Staff Kang Hoon-sik and presidential policy chief Kim Yong-beom pose for a photo at a senior party-government consultative meeting held at the prime minister's official residence in Samcheong-dong, Jongno-gu, Seoul, on Sunday. [Yonhap]
Prime Minister Han Seong-sook, Democratic Party of Korea leader Kim Min-seok, floor leader Han Byung-do, presidential Chief of Staff Kang Hoon-sik and presidential policy chief Kim Yong-beom pose for a photo at a senior party-government consultative meeting held at the prime minister's official residence in Samcheong-dong, Jongno-gu, Seoul, on Sunday. [Yonhap]

Democratic Party of Korea leader Kim Min-seok has formally called for revisions to the government's plan to tighten taxes on single-home owners who do not live in their properties. He argued that those with unavoidable reasons for non-residency — such as job relocations, children's schooling or caring for elderly parents — should be granted broad exemptions to avoid an unfair tax burden.

Kim raised the concerns Sunday at a senior party-government consultative meeting held at the prime minister's official Seoul residence in Samcheong-dong. "I broadly agree with the government and the president's direction on expanding real estate supply and reforming the tax system, and on that basis I would like to offer a few suggestions for improvement," he said.

The meeting was the first senior party-government consultative session Kim attended as party leader since his election at the Democratic Party's national convention on Monday, and the government's real estate tax reform package emerged as a central item for discussion.

Kim particularly flagged the risk of a sharp increase in the comprehensive real estate tax burden on single-home owners who do not reside in their properties.

The government had earlier announced a tax reform plan that would strengthen taxation on non-resident single-home owners. Under the plan, the comprehensive real estate tax basic deduction threshold for owner-occupiers would rise from the current 1.2 billion won ($861,000) to 1.4 billion won, while the threshold for non-resident single-home owners would be lowered from 1.2 billion won to 900 million won. The cap on the annual increase in the comprehensive real estate tax burden would also be raised from 150 percent to 200 percent of the previous year's property holding tax.

"Even under the current system, non-residents already face a natural increase in their comprehensive real estate tax burden as assessed property values rise," Kim said. "The proposed adjustment — lowering the basic deduction for non-resident single-home owners from 1.2 billion won to 900 million won and raising the tax burden cap to 200 percent — requires careful and thorough deliberation."

Kim also said it would be wrong to uniformly raise the tax burden simply because a homeowner does not live in their property. "For non-resident single-home owners, the wide variety of unavoidable real-life reasons for non-residency must be broadly recognized, and there must be no blind spots," he said.

Since the government unveiled its proposal, voices within the Democratic Party have raised concerns that the tightened taxation could affect single-home owners who rent out their homes and live elsewhere due to job changes, their children's schooling or the need to care for aging parents.

Kim also urged a cautious approach to the proposed reform of the special long-term holding deduction on capital gains tax.

Under the current system, single-home owners can receive a special long-term holding deduction of up to 40 percent each for the period of ownership and the period of actual residency, for a combined maximum of 80 percent. The government is pursuing a plan to restructure the benefit around actual residency, abolishing the ownership-period deduction that has applied to non-resident single-home owners and concentrating the benefit on the length of time the owner actually lived in the property.

Kim said he saw merit in the overall direction of effectively converting the special long-term holding deduction into a "long-term residency income deduction" model, but cautioned that "we must carefully examine whether the cascading effects of this reform could have a negative impact on the jeonse and monthly rent market."

The government left open the possibility of adjusting the details of the plan through further discussions with the party.

Presidential Chief of Staff Kang Hoon-sik said Sunday that "the tax reform proposal was not a unilateral announcement of a decided policy, but the release of a starting-point proposal to hear the public's views," adding that "this meeting was arranged to discuss how the policy can be finalized in a more rational form."

On the separate question of housing supply, the party and government were in full agreement that supply must be expanded as quickly as possible.

"The core of residential stability is, above all, expanding supply," Kim said. "Every available means and method must be mobilized for comprehensive land acquisition and the expansion of real estate supply."

He went on to say that the party would "fulfill its legislative responsibilities as the ruling party — including streamlining permit and approval procedures and dismantling various regulations — to accelerate the expansion of real estate supply."

Kang also said that "signaling is paramount when it comes to housing supply," and that securing residential land to expand supply in the Greater Seoul area was the central task at hand.

The real estate tax discussions are also seen as the first test of the party-government relationship under Kim's leadership. Until last month, Kim had attended senior party-government consultative meetings in his capacity as prime minister; he now takes his seat as the ruling party leader, tasked with conveying public sentiment to the government on policy matters.

Kim said the relationship between the party, government and presidential office "must become closer," but pledged to adapt his role to his new position. "The direction is the same — unity between the party, government and presidential office for the success of the Lee Jae Myung administration — but, as the old saying goes, 'a person of virtue changes with the times,' and I will fulfill a role suited to where I now stand," he said.

"I will be faithful to my role in the party — different from when I was in government — with a sense of comradely responsibility to build and sustain this administration, and a legislator's responsibility to reflect public sentiment in lawmaking," he added. "Until a final conclusion is reached, I will engage in vigorous debate with the government without losing a healthy sense of tension."


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