[EDITORIALS]Mass confusion on housing

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[EDITORIALS]Mass confusion on housing

The government is going around in circles regarding the planned introduction of new real estate tax systems. First of all, policymakers are making confusing remarks about the plan to sharply increase the capital gains taxes on home sales by persons who own three or more houses. That plan would go into effect in January; it is part of the real estate policy announced on Oct. 29, 2003.
Deputy Prime Minister Lee Hun-jai said on Nov. 12, “We are considering a delay in putting the plan into effect by about one year.” He said the extra time was needed to give people with several houses more opportunities to sell their houses before property tax rates jump.
But Lee Joung-woo, the Blue House policy planning chief, said, “The plan to raise capital gains taxes sharply should take effect at the start of next year as scheduled.” Lawmakers of the governing Uri Party said that the government should be flexible on when to put the plan into effect, because real estate market conditions are not good now. Then the Blue House said in a statement, “The plan to increase capital gains taxes on Jan. 1 has not changed.” But yesterday, Lee Hun-jai repeatedly said, “We are considering delaying the enforcement of the plan by one year.”
Everybody is now confused; who knows whom to believe?
The JoongAng Ilbo has repeatedly said that the government should be careful in deciding real estate policies and should be consistent in carrying out the policies. But Seoul is only causing more confusion about its real estate policy.
The real estate market is frozen and directionless. The comprehensive real estate tax system, which is scheduled to take effect next year is opposed even by many governing party lawmakers. The bill to legislate the new rules has not yet been introduced in the National Assembly. And the administration has not yet decided how much to reduce taxes on real estate trades in exchange for increasing property taxes in the comprehensive tax system. No deals can be made, because nobody knows how much tax to pay.
Mr. Lee said, “It is natural that there are various opinions.” But confused policies that affect the people’s property rights cannot be euphemized as “various opinions.”
Trust in the government’s policies depends on whether they are expected and consistent. The government is sowing nothing but uncertainty.
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