Apartment buildings densely fill the cityscape as seen from Seoul’s Namsan Observatory. (Yonhap)
SEOUL, Jan. 26 (Korea Bizwire) — President Lee Jae Myung’s decision not to automatically extend a temporary tax break for owners of multiple homes reflects an effort to restore policy normalcy and curb speculative investment in the housing market, a senior presidential aide said Monday, as opposition from property owners continues to mount.
Lee Kyu-yeon, the senior presidential secretary for public relations, made the remarks in an interview with a YouTube channel, responding to growing criticism ahead of the exemption’s expiration on May 9.
The tax relief measure, which eases heavy capital gains taxes on sales by multi-home owners, was first introduced in May 2022 to revive a sluggish housing market. It had been renewed on a yearly basis before President Lee took office last June.
“This is not a decision to raise taxes,” Lee said in the interview. “The president believes the exemption could be extended for one or two years if circumstances require it. But allowing it to roll over automatically is not a normal or sustainable policy approach.”
Under current law, capital gains taxes on real estate sales range from 6 to 45 percent. Owners of two homes in designated speculative areas face an additional 20 percentage-point surcharge, while those holding three or more properties are subject to a 30 percentage-point increase on top of the base rate.
The presidential office said the administration remains concerned that prolonged tax leniency could encourage speculative buying, distorting the housing market and weakening the broader economy.
Mr. Lee has repeatedly warned that unchecked real estate speculation could erode economic stability, aides said, often pointing to Japan’s “lost three decades” — the prolonged stagnation that followed the collapse of its asset bubble in the early 1990s — as a cautionary example.
While the administration has not ruled out a limited extension, officials stressed that any decision would be based on market conditions rather than precedent, signaling a shift away from ad hoc housing policies that have dominated previous administrations.
M. H. Lee (mhlee@koreabizwire.com)
