Democratic Party Denies 'Baseless' Discussion on Scrapping Long-Term Holding Tax Break

The Democratic Party of Korea officially stated on the 20th that it has not reviewed, at the party level, a proposal to abolish the long-term holding special deduction, a tax benefit for long-term property owners when calculating real estate capital gains tax. Kang Joon-hyun, the chief spokesperson for the Democratic Party, said at the National Assembly on the 20th that the party had not considered any tax reform, including the abolition of the long-term holding special deduction. This statement was intended to clarify that the related discussions raised by some parties and the recent bill proposed by some lawmakers to abolish the deduction are not the party's official stance.

The long-term holding special deduction is a system that allows owners of a single home held and resided in for more than 10 years to deduct up to 80% of their capital gains. Rep. Yoon Jong-o of the Progressive Party and 10 other lawmakers had previously proposed an amendment to the Income Tax Act that would abolish the long-term holding special deduction and limit the tax credit for gains from homes held for more than three years to a lifetime cap of 200 million won.

Chief spokesperson Kang stated that Democratic Party leader Lee Jae-myung had explained his position regarding the controversy over the abolition of the long-term holding special deduction, emphasizing that Lee's remarks were merely intended to cautiously address issues related to holding homes for speculative purposes and were unrelated to tax reform. Lee had pointed out on social media that claims that abolishing the long-term holding special deduction would lead to a tax bomb for single homeowners living in their properties were clearly false propaganda.

Meanwhile, Rep. Jeong Jin-sik, policy committee chairman of the People Power Party, questioned during a supreme council meeting whether the Democratic Party was attempting to reverse the leader's stance on abolition or divert attention, demanding a clear statement of their position.