Lee Hyeong-il: Special property tax hike should favor actual residents

Deputy Prime Minister and Minister of Finance and Economy Lee Hyeong-il said Monday that if owner-occupied and non-resident single homes were treated the same, the principle of favoring owner-occupied housing could not be upheld, responding to the Democratic Party's demand that the comprehensive real estate tax basic deduction for non-resident single-home owners be raised to 1.4 billion won ($1 million). The comprehensive real estate tax is levied on those who own multiple high-value homes. In August, the government announced a tax overhaul raising the basic deduction for owner-occupied single-home owners from 1.2 billion to 1.4 billion won while lowering it to 900 million won for non-resident single-home owners, but scrapped the reduction plan amid backlash and kept the deduction at 1.2 billion won.

At a general meeting of the National Assembly's Special Committee on Budget and Accounts on Monday, the deputy prime minister answered "this principle must be upheld" when Democratic Party lawmaker Hwang Myeong-seon pointed out that "the principle of differentiation between owner-occupied and non-resident homes must be maintained." He explained that "the core of this tax overhaul is to settle a housing market centered on actual residents."

Lee said the government plans to apply the same 1.4 billion won basic deduction to non-resident owners who do not live in their homes for unavoidable reasons. He added that this would be delegated to an enforcement decree, under which various circumstances will be examined during the drafting process.

Chun Jun-ho, senior deputy floor leader of the Democratic Party, called on members to refrain from commenting on real estate policy at a caucus meeting Monday. President Lee Jae-myung is set to invite Kim Min-seok, the party's chief, and floor leader Han Byung-do to the presidential office for dinner Tuesday.