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Yoon to scrap 'reckless' plan to raise declared real estate value

Published: 19 Mar. 2024, 19:13 Updated: 19 Mar. 2024, 19:18

SARAH KIM
[email protected]

President Yoon Suk Yeol speaks at the 21st public livelihood town hall at the Seoul Art Space Mullae in Yeongdeungpo District, western Seoul, on Tuesday. [JOINT PRESS CORPS]

President Yoon Suk Yeol said Tuesday that the government will completely scrap the previous administration's "reckless" plan to intentionally raise the declared real estate value in order to alleviate the public economic burden.

"Our government will completely abolish the reckless plan on declared [real estate] prices, so people no longer have to worry," Yoon said during a town hall meeting held in Yeongdeungpo District, western Seoul.

He referred to a 2020 real estate policy from the previous President Moon Jae-in government, which aimed to gradually raise state-evaluated real estate prices up to 90 percent of their market prices by 2035.

Yoon said that the Moon administration aimed to control soaring house prices caused by their real estate policy failures by imposing "punitive" taxes.

He claimed that the policy resulted in "significant side effects and further hardship."

The state-evaluated declared prices serve as a basis for fairer comprehensive tax measures including the levying of property taxes, health insurance fees and national pension premiums.

The Moon administration's real estate policies faced public criticism over skyrocketing home prices, which drove up tax burdens on homeowners as well as the cost of property for people seeking to rent or buy homes. The public has pointed out there was a disparity in fairness due to the large gap between the market price and the declared real estate price.

Yoon said that the previous government raised the declared value of real estate by an average of 10 percent annually over five years in office, totaling to 63 percent. This became a heavy burden for the average single-homeowner.

Though he preferred to amend the relevant law, Yoon said that for the time being, the government will "employ various policy tools to produce the effect of scrapping" the policy.

The 22nd public livelihood debate also focused on urban development projects and efforts to reduce the burden of housing costs for youths and low-income people.

Yoon announced that the government will purchase 100,000 units of newly built small to medium-sized homes over the next two years and lease them to vulnerable people for low rent, as detailed in his urban regeneration policy.

This is part of the government's "New Village" project to renovate Seoul's old downtown. The project aims to provide clean housing with high-quality apartment-like community facilities by renovating old single-family houses and villas into new town houses and modern villas.

Yoon promised that the government would inject 10 trillion won ($7.4 billion) for the project over the next decade.

Yoon stressed the importance of "creating new urban spaces and reducing housing costs" as a part of efforts to improve people's livelihood and create accessible affordable housing.

BY SARAH KIM [[email protected]]