KB News Desk
President Lee Jae Myung said Thursday that Korea would need to triple its property holding tax rate to meet levels in other advanced economies, but warned that such a sharp increase would face strong public resistance.
Lee made the remarks during a national forum on real estate policy held at KBS in Yeouido, Seoul.
Property holding taxes refer collectively to the local property tax and the national comprehensive real estate holding tax, which is imposed on owners whose combined property value exceeds certain thresholds.
“Raising the holding tax is not really strengthening it. We need to triple it to match the typical level of advanced countries,” Lee said.
“But raising it threefold would lead to a situation similar to a riot. … This should have been done a long time ago, but (housing prices) are too high now,” he said.
Lee acknowledged that the government would ultimately have to find a compromise, while stressing the need to prepare “for what lies ahead,” he said, describing the housing issue “a problem that will surface eventually.”
The president also called for housing policies that distinguish single-home owners from people who own multiple properties for investment purposes.
“We should provide protection for a home purchased for actual residence,” Lee said. “But some multiple-home owners clearly buy properties to increase their wealth. I believe those who purchase several homes to make money should naturally be treated differently.”
Lee said the key question would be the extent of such differential measures, including how the government defines ultra-expensive homes.
He added that setting appropriate thresholds would be difficult and could trigger significant resistance from taxpayers, underscoring the need for extensive public discussion before any policy changes are introduced.
