Where are the rules?The ruling Democratic Party (DP)’s flip-flop on property ownership tax has been adding to confusion. During a meeting of a special committee on real estate, acting DP chairman and floor-leader Yoon Ho-joong vowed a comprehensive review on housing supplies, financing, the tax system and welfare to come up with effective measures. Although policy direction should not alter course greatly, he did not rule out discussions on tax easing. A day earlier, Rep. Choi In-hoo, senior spokesperson of the DP, said the party won’t be addressing real estate taxes. “There has been no serious talks on the matter nor any will to discuss the issue”
Asked about the sudden change, Yoon joked the spokesman must have “spoke his mind, not the party’s, as his term will be over soon.” But the affair touches the hearts of the people too greatly to be taken as a joke.
Since the crushing defeat of the April 7 by-elections, many in the DP leadership mentioned changes to the property ownership tax. The outline was to raise the property tax exemption threshold to 900 million won ($809,400) in home appraisal value from the current 600 million won and also lift the threshold for the comprehensive property tax to 900 million won. Deputy Prime Minister Hong Nam-ki also admitted the need for review. Then loyalists to President Moon Jae-in protested the move aimed at cutting taxes for the rich, as it goes against the policy to ease real estate disparities.
Even the DP’s policy chief Hong Ik-pyo cannot seem to make up his mind. He admitted that the comprehensive property tax that serves as a kind of taxation on expensive homeowners or the rich has broadened as a result of government-triggered spikes in home values. But a week later, he said a review on the property tax should be considered at the last minute.
The confusion raises questions about if the DP has ever seriously considered softening the comprehensive property tax or has the determination to see through it. Its behavior and rhetoric has so far feigned to sympathize with the public. But there must not have been serious discussions, given the flipflops. Some now argue that Korea should be governed for the 52 million people, not for the 520,000 who are subject to the property tax. The DP had also mentioned easing in the property tax before the parliamentary elections in April last year and then scrapped it. It may resort to the same trick.
One out of four apartments in Seoul falls under the comprehensive property tax as the appraised values of their apartments have exceeded the 900-million-won threshold this year. Property tax is no longer a matter for the rich as it affects the ordinary people. The DP repeatedly vowed to make amends for its past mistakes. Has the party already forgotten?