Opposition to Property Tax Reform Plan Surges to 3,700 in Just 4 Days

Public Opinion Surges to 3,700 in Four Days Since Tax Reform Announcement

Backlash from ordinary investors against the government's real estate tax reform plan is intensifying. The portal for public legislative proposals has been flooded with thousands of opposing opinions in just a few days. According to the Ministry of Economy and Finance and the National Assembly’s Strategy and Finance Committee, public opinions on the recently announced tax reform plan surpassed a whopping 3,700 within six days of its release. The vast majority of these opinions focus on strong opposition to policies that increase the burden of property taxes.

The most controversial aspect involves specific measures that increase the burden of the Comprehensive Real Estate Tax (Jeonse tax). Adjustments to the basic deduction amount or increases in the fair market value ratio currently under review by the government act as direct factors increasing tax expenditures for multi-homeowners and non-residents. In particular, contrary to the original intent of managing the housing market based on actual demand, concerns are spreading that ordinary investors and the middle class could also face a 'tax bomb.'

Dilemma of Taxing Non-Residents and Setting Exception Criteria

The part the government is most deliberating on is strengthening taxation on non-residents and establishing exception criteria. The Comprehensive Real Estate Tax aims to curb speculative demand by applying higher tax rates to non-residents who own homes but do not reside in them. However, authorities like Koo Yoon-cheol, the 1st Vice Minister of Economy and Finance, are facing a situation where they must accept opinions that improvements are necessary in the design of the system. This is because there are many cases where non-residents fail to meet residency requirements due to unavoidable reasons, such as moving for children's education, temporary overseas business trips, or medical treatment.

If tax rates are raised uniformly without carefully examining these exception criteria, tax resistance is bound to intensify. According to a report by News1, a series of opinions have been filed appealing the unfairness of the system regarding residency requirements. Ultimately, the government faces the task of finding a realistic compromise that realizes tax justice while minimizing inconvenience caused by the public's daily housing movements.

Backlash from Young Investors and the Legislature's Response

This controversy over real estate and financial taxes is sending shockwaves through the stock market and young investors. President Lee Jae-myung has recently ordered a full re-examination of the revisions to the Individual Savings Account (ISA) and the so-called 'anti-stock suppression bill.' Critics argue that a policy, even if started with good intentions, is worse than none if the public does not feel its effects and instead suffers harm. The President's warning—that real estate tax reform must consider market shocks and perceived economic conditions before achieving the goal of securing tax revenue—is serving as an important benchmark for gauging the legislature's future stance.

Ruling and opposition party members are also showing a cautious stance regarding the processing of bills related to real estate and the economy. Rep. Han Byeong-do emphasized that active cooperation between the government and the ruling party is necessary to process housing supply-related bills. This is interpreted as a criticism that increasing housing supply must precede regulating the real estate market by raising taxes. A consensus is forming that fundamental measures to promote market stability are needed rather than simple tax increases.

Outlook on Supplementary Exceptions and Legislative Schedule

The real estate tax reform plan is expected to undergo further revisions and supplements at the National Assembly. According to the Ministry of Economy and Finance, they plan to analyze the full text of the 3,700 public opinions received so far to minimize blind spots in the system. Efforts will likely accelerate to go beyond simply alleviating tax burdens, preventing the shrinking of asset accumulation opportunities for the middle class due to the rise in fair market value ratios, and establishing detailed guidelines that acknowledge inevitable non-residency status.

The final outline of this tax reform is expected to be addressed during the next regular session of the National Assembly. Analysis suggests that readjustment of detailed provisions, such as refining the criteria for judging residency requirements and rationalizing the long-term holding special deduction, will be inevitable as the bill passes the subcommittee of the Standing Committee. Ultimately, the success or failure of this policy will depend not on whether the tax revenue target is met, but on how clearly and reasonably the exception criteria are designed to prevent tax appeals and market confusion.