President Lee Jae Myung stated Thursday that Korea would need to triple its property holding tax significantly. He made these remarks during a national real estate forum held at KBS studios. Consequently, Lee acknowledged this dramatic increase would likely trigger strong public resistance nationwide.
Indeed, property holding taxes combine the local property tax and national comprehensive real estate holding tax collectively. These taxes apply specifically to owners whose combined property value exceeds certain established thresholds. According to Lee, simply raising the holding tax modestly would not achieve meaningful reform. Instead, he argued Korea must triple current rates to match advanced economy standards. However, he warned that such a dramatic increase could provoke reactions resembling civil unrest.
Furthermore, Lee suggested this reform should have happened years earlier before housing prices climbed so high. Nevertheless, he acknowledged the government would eventually need to negotiate a reasonable compromise moving forward. Therefore, Lee described housing policy as an issue that will inevitably resurface regardless of delays.
Additionally, Lee called for policies distinguishing single-home owners from those holding multiple investment properties specifically. He emphasized that homes purchased for actual residence deserve stronger legal and financial protection. Meanwhile, he argued that multiple-property owners buying purely for wealth accumulation warrant different treatment entirely. “Those who purchase several homes to make money should naturally be treated differently,” Lee said.
Moreover, Lee identified defining ultra-expensive homes as a particularly challenging aspect of this policy discussion. He noted that setting appropriate thresholds could prove difficult and provoke significant taxpayer resistance. Therefore, Lee stressed the importance of extensive public discussion before implementing any concrete policy changes.
Ultimately, this proposed holding tax reform reflects growing pressure to address Korea’s persistent housing affordability challenges. Going forward, officials will likely face considerable debate balancing fair taxation against public backlash concerns.
