[EDITORIALS]Real estate policy: just a messThe initial reaction that the public has shown to the various tax and real estate-related policies that the government has presented is that they are just too confusing.
“What is the government trying to do?” the people ask. The government policies leave the people in the dark as to what the real objectives are.
The additional tax on real estate holdings that the government wants to impose starting next year had been challenged for its alleged unconstitutionality even before it was introduced, and experts point out several irrationalities and problems with the bill. Even members of the governing Uri Party, not to mention the opposition Grand National Party, are opposing the overly hasty implementation of the new tax system. There is also a debate over how much the real estate transaction taxes, including taxes on registration and acquisition, should be lowered. The additional tax on households owning more than three houses that was one of the major measures announced last October to prevent real estate speculation was intended to begin next January. It reportedly could be delayed. The government plan to increase restrictions on land area size in regions where land transactions are allowed was stopped by opposition from the Regulatory Reform Committee.
With government policies oscillating, the real estate market has plunged into even deeper gloom, and those who need to sell or buy houses urgently can merely wait in frustration. Right now, no one can tell how much tax they will have to pay, which regulations will be loosened and what new regulations will be introduced.
The government itself has no idea where it wants to lead its real estate policies. It wants to stop real estate speculation but it doesn’t want to choke off the entire market, so its policies keep on jumping from one side to the other. Such problems, though understandable, should have been dealt with before any policy announcements. There should have been analysis and opinion gathering before any decisions. Seoul has made the situation worse by presenting inconsistent policies whenever a new dimension or problem rises and belatedly trying to solve it. Real estate transactions are the most important economic transactions for average households.
The government should be more prudent and consistent in pursuing its real estate policies.