Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol has reaffirmed his plan to revise tax standards so that single-home owners who cannot live in their own property due to unavoidable circumstances are treated as residents for tax purposes.

Speaking at a National Assembly budget and accounts committee session Monday, Koo said he would "boldly reclassify non-residency as residency where non-residency is reasonable, and resolve the issue," after Democratic Party of Korea lawmaker Ahn Do-geol raised the need to address gaps in the current system for non-resident single-home owners.

Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol answers lawmakers' questions at a plenary session of the National Assembly's budget and accounts committee on Monday. [Yonhap]
Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol answers lawmakers' questions at a plenary session of the National Assembly's budget and accounts committee on Monday. [Yonhap]

Koo said the government had scaled back tax benefits for non-resident homeowners because offering incentives regardless of residency had allowed people to hold properties without living in them, distorting the housing market. "We normalized that," he said, adding that the government would "listen carefully to the voices of various citizens and seek more reasonable measures."

He said the tax overhaul centered on residency had already begun to produce results, with more properties coming onto the market. Addressing concerns that the restructuring could unsettle the jeonse and monthly rent market, Koo said, "Either way, as we move toward a residency-centered approach, we are seeing some supply come onto the market."

He went on to say the government was "well aware of concerns about jeonse and monthly rent" and pledged to "gradually expand deductions for jeonse and monthly rent and make greater efforts to provide more incentives for young people in the rental market."

Koo also said the government would focus its policy efforts on expanding housing supply. "Ultimately, supply must increase," he said. "We will sharply streamline procedures and concentrate all administrative resources on boosting supply as quickly as possible."

He also expressed agreement with Ahn's suggestion that the supply base of the private rental market needed to be broadened.

Koo said the government would "activate private companies specializing in rental housing through publicly supported private rental schemes so that rental properties reach the market quickly," adding that it would also exclude private rental properties from the comprehensive real estate tax base, promote construction-based rentals, and provide maximum support for purchase-based rentals. "We will nurture businesses that rent out properties over the long term," he said.


y2k@heraldcorp.com