Jun Ji-hye, a reporter at the finance desk of The Korea Times, focuses primarily on economic policy and government agencies, mainly covering the Ministry of Finance and Economy, the Ministry of Budget and Planning, the National Tax Service and the Korea Customs Service. She previously covered financial authorities, including the Financial Services Commission and the Financial Supervisory Service, and earlier worked on the political, city and business desks, reporting on a wide range of issues.
Will ruling party revise real estate tax plan under new leadership?
Newly elected Democratic Party of Korea (DPK) leader Kim Min-seok, left, speaks during the DPK’s Supreme Council meeting at the party's Busan branch, Wednesday. Yonhap
By Jun Ji-hye
Public backlash fuels calls for changes, but revisions risk deepening party rifts
Eyes are on whether the ruling Democratic Party of Korea (DPK), under new leader Kim Min-seok, will seek changes to the government’s real estate tax overhaul plan announced early this month, amid growing concerns over higher tax burdens and housing insecurity, according to political observers, Wednesday.
Kim, the former prime minister, has already voiced opposition to a proposed tax increase for single-home owners who do not live in their properties, a measure that has drawn considerable public backlash.
The new party leadership is expected to begin discussions with the government on possible revisions soon.
“The first high-level meeting between the ruling party and the government under the new leadership will be held at 11 a.m. on Aug. 23, with major policy issues expected to be discussed,” senior party spokesperson Rep. Park Sung-joon told reporters.
The government’s proposals would raise the tax burden on owners of expensive homes who do not reside in them, as well as on people who own multiple properties. In particular, the plan would lower the basic deduction for nonresident single-home owners under the comprehensive real estate tax, effectively increasing their annual holding costs.
The proposal has also triggered debate within the ruling party over whether tax policy should distinguish between homeowners based on whether they actually reside in their properties. Critics argue that the measure could place a heavier burden on single-home owners, including those with legitimate reasons for not living in their properties.
Kim already expressed opposition to the overhaul during his leadership campaign and called for the plan to be reconsidered.
“Scrapping the holding deduction for nonresident single-home owners could effectively raise taxes for those with properties valued at 1.2 billion won ($857,000) or more, a threshold that covers a large share of apartments in Seoul,” he earlier wrote on X. “Particular attention should be paid to the ripple effects of tax changes for middle-class single-home owners who do not live in their properties, especially on the rental housing market.”
The Ministry of Finance and Economy, which drew up the tax overhaul plan, initially planned to make targeted adjustments to a new individual savings account scheme in response to public feedback, while keeping the real estate tax overhaul largely intact and leaving its final passage to the National Assembly.
Kim’s election as ruling party leader, however, has raised the possibility that lawmakers could revisit the policy at a more fundamental level rather than simply amend a few contentious provisions.
The key question is whether the party will rethink the underlying approach to housing taxes in light of widespread sentiment that single-home owners should primarily be viewed as end users.
Political observers said the issue could further expose divisions within the ruling party, as Rep. Choi Min-hee, a newly elected Supreme Council member, has called for the government’s plan to remain largely unchanged. Choi is a close ally of Rep. Jung Chung-rae, former DPK chairman and Kim’s final rival in the leadership race.
“The package represents a sound housing reform agenda under President Lee Jae Myung. Any changes should be limited to fine-tuning rather than altering its overall direction,” Choi said during a KBS radio appearance.
On the other hand, Seoul-based lawmakers are raising concerns that the tax measures could prove politically costly, particularly ahead of future elections.
Rep. Kim Young-bae said recent shifts in public sentiment over housing showed that the party could no longer rely on its existing policy framework to appeal to Seoul voters.
“The new leadership should make addressing housing concerns a top priority,” he said.