SEOUL, July 8 (Korea Bizwire) — Politicians and high-rank government officials owning more than one house are coming under growing pressure to dispose of properties as the government is preparing steps to hike tax burdens for owners of multiple homes in efforts to curb soaring housing prices.
Housing prices have continued to surge in many parts of South Korea since President Moon Jae-in took office in 2017, sparking strong discontent among those in their 30s and 40s, the main support group for the government.
This has pressed the government to take stern actions to curb property speculations and stabilize the house market, particularly in the densely populated Seoul and its adjacent areas.
After the government’s rounds of market stabilization measures yielded no tangible results, Moon on Monday pledged “utmost efforts” to curb market speculation, labeling the task of bringing the property market under control as “the top priority for people’s livelihood.”
Preparing another round of measures against the property market fever, the government and the ruling party are considering additional options to increase property taxes on owners of multiple houses while hiking tax burdens on short-term house transactions.
As possession of multiple houses has become a point of criticism, civic groups came forward to demand that lawmakers and high-rank government officials take the lead and become the first to sell houses they don’t live in.
The Citizens’ Coalition for Economic Justice, an influential Seoul-based civic group, announced during a press conference Tuesday that 42 ruling party lawmakers elected in the April 15 parliamentary elections owned two or more houses in breach of their election promises.
The revelation is based on its analysis of reports that 180 candidates of the ruling Democratic Party (DP) and its satellite party submitted to the National Election Commission about their assets ahead of the elections.
The lawmakers then had pledged to sell off their real estate properties except their current residences in two years but did not carry out their promises, the group noted.
“While threatening people to sell houses, (DP lawmakers) have been rather encouraging market speculation behind their backs,” the civic group argued, urging the lawmakers to live up to the election promises.
The group also claimed that over the past three years under the Moon Jae-in administration, apartment prices in Seoul shot up 52 percent, laying the blame of the market craze on the government and the ruling party’s real estate policy deemed largely unsuccessful.
Another civic group, People’s Solidarity for Participatory Democracy, on Wednesday pressed multiple home-owning members of the two parliamentary committees in charge of real estate policy — the land and finance committees — to unload properties or give up their committee seats.
According to the civic group, 16 of the 56 lawmakers belonging to the two committees — 10 from the main opposition United Future Party and six from the DP — currently own more than one home.
“Multiple home-owning members of the two committees … should dispose of their assets in order to avoid conflict of interest and improve public trust in their legislation, or they should move to other committees that do not address legislation on real estate and housing,” the group said in a press conference.
The group stressed high-ranking officials at the land and finance ministries should follow suit to sell off unneeded houses or be dismissed from policy-making posts that involve real estate.
As politicians and government officials became the focus of scrutiny, the president’s Chief of Staff Noh Young-min came under fire for owning two apartments — one in Seoul’s Seocho Ward, which reported one of the highest rates of price growth in past years, and the other in a regional city of Cheongju.
After Moon “strongly advised” his presidential aides last week to sell any additional homes they own, Noh pledged to sell the apartment in Cheongju last week.
This, however, led to more finger-pointing to Noh’s reluctance to part with property in one of the poshest neighborhoods in Seoul.
Criticism also came from inside the ruling party, including calls for Noh’s resignation raised by some party officials.
On Tuesday, former prime minister, Rep. Lee Nak-yon of the DP, expressed hope that Noh would sell the house in Seoul, during a press conference to declare his candidacy for the party’s leadership race.
Noh finally gave in to the growing heat and announced Wednesday his decision to unload the Seoul apartment as well.
“Unlike my intention, my decision to sell the apartment in Cheongju instead of the one in Seoul happened to look as if I was sticking to the latter, and this fell short of people’s expectations,” the presidential chief of staff said in his Facebook account, offering his apology.
He said the previous decision was made in consideration of his family living in the Seoul apartment now, but he will dispose of it as soon as a new home is arranged for his family.
Other Cheong Wa Dae officials are likely to follow suit after 12 high-level presidential aides have been advised to dispose of their second or third houses within this month.
The civic group also accused National Assembly Speaker Park Byeong-seug of suspected property speculation.
It argued the price of Rep. Park’s apartment in Seoul’s Seocho Ward jumped more than 2.3 billion won (US$1.9 million) over the past four years. Park, however, dismissed the allegation, stressing that he has lived in the apartment for 40 years.
As public ire continues over deep-pocketed property investment by some politicians and high-level officials, Prime Minister Chung Sye-kyun prodded public officials Wednesday to sell off houses if they have more than one.
“If high-ranking public officials (continue to) own several houses, any property measures (to stabilize the market) cannot easily win public trust. There can be no valid measures at all,” Chung told a regular virus response meeting, attended by high-level officials from various government agencies.
“Each ministry should promptly study property holdings of its high-ranking officials and have them sell if they have more than one house,” Chung instructed the officials.
“(We) are in a serious period when high-rank public officials need to take the initiative and set an example.”