'Wielding the tax whip — a contradictory act'
People Power Party lawmaker Ahn Cheol-soo on Wednesday sharply criticized the government, calling for the abolition of the reconstruction excess profit recovery levy.
In a Facebook post that day, Ahn said "a reconstruction excess profit recovery bomb has been dropped across the entire country," adding that notices sent to 79 project sites nationwide as of August totaled 5.3 trillion won ($3.91 billion) in levies.
"The reconstruction excess profit recovery levy is a law born of a sadistic intent to punish reconstruction," Ahn said. "Residents who pay their fair share of contributions to replace an old home with a new one — people who have not even sold and made a profit — are being forced to hand over hundreds of millions of won in advance simply because the asking price has risen. What public purpose does that serve?"
Ahn argued that the proper approach was straightforward. "Once a reconstruction project produces a new building, residents can pay property tax accordingly, and if the home's value has risen when they sell, they can pay capital gains tax on the profit at that point," he said.
"Redevelopment and remodeling are exempt — only reconstruction is targeted, and on the basis of unrealized gains at that, stripping people of hard-earned money," Ahn said. "On top of that, payment must be made in cash within six months of the assessment date."
He added that those flaws explained why the levy, introduced in 2006 under the Roh Moo-hyun administration, had been suspended repeatedly over the past 20 years and never actually collected. "It was a law born of 'reconstruction sadism' — so detached from reality that it could never be enforced," he said.
Turning his fire on the Lee Jae Myung administration, Ahn said the levy was now being put into practice for the first time. "The government talks about boosting housing supply, yet buries reconstruction — one of the key pillars of that supply — under a mountain of regulation, and then whips residents who still try to build new homes with yet another tax. That is a contradictory act," he said.
Ahn also challenged the government's internal logic. "If President Lee recently pledged that a sharp drop in home prices is coming, is there any reason to impose and maintain this levy?" he said. "Unless the government is prepared to guarantee future market prices or refund the levy if prices collapse, it should be abolished outright."
raining@heraldcorp.com
